FPI 10-Q
Farmland Partners Inc. (FPI)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
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Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒
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☒ | Smaller reporting company | |||
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As of April 24, 2026,
Farmland Partners Inc.
FORM 10-Q FOR THE QUARTER ENDED
March 31, 2026
TABLE OF CONTENTS
2
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Farmland Partners Inc.
Consolidated Balance Sheets
As of March 31, 2026 (Unaudited) and December 31, 2025
(in thousands, except par value and share data)
March 31, | December 31, | |||||
| 2026 | | 2025 | |||
ASSETS | ||||||
Land, at cost | $ | | $ | | ||
Grain facilities |
| |
| | ||
Groundwater |
| |
| | ||
Irrigation improvements |
| |
| | ||
Drainage improvements |
| |
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Permanent plantings | | | ||||
Other | |
| | |||
Construction in progress |
| |
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Real estate, at cost |
| |
| | ||
Less accumulated depreciation |
| ( |
| ( | ||
Total real estate, net |
| |
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Cash and cash equivalents |
| |
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Loans and financing receivables, net |
| |
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Right of use asset, net | | | ||||
Accounts receivable, net |
| |
| | ||
Derivative asset | — | | ||||
Inventory |
| |
| | ||
Equity method investments | |
| | |||
Prepaid and other assets |
| |
| | ||
TOTAL ASSETS | $ | | $ | | ||
LIABILITIES AND EQUITY | ||||||
LIABILITIES | ||||||
Mortgage notes and bonds payable, net | $ | | $ | | ||
Lease liability | | | ||||
Dividends payable |
| |
| | ||
Accrued interest |
| |
| | ||
Accrued property taxes |
| |
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Deferred revenue |
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Accrued expenses |
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Total liabilities |
| |
| | ||
Commitments and contingencies (See Note 8) | ||||||
Redeemable non-controlling interest in operating partnership, Series A preferred units | — | | ||||
| ||||||
EQUITY | ||||||
Common stock, $ |
| |
| | ||
Additional paid in capital |
| |
| | ||
Retained earnings |
| |
| | ||
Cumulative dividends |
| ( |
| ( | ||
Other comprehensive income |
| — |
| | ||
Non-controlling interests in operating partnership |
| |
| | ||
Total equity |
| |
| | ||
TOTAL LIABILITIES, REDEEMABLE NON-CONTROLLING INTERESTS IN OPERATING PARTNERSHIP AND EQUITY | $ | | $ | | ||
See accompanying notes.
3
Farmland Partners Inc.
Consolidated Statements of Operations
For the three months ended March 31, 2026 and 2025
(Unaudited)
(in thousands, except per share amounts)
For the Three Months Ended | ||||||
March 31, | ||||||
| 2026 | | 2025 | |||
OPERATING REVENUES: | ||||||
Rental income | $ | | $ | | ||
Crop sales | | | ||||
Other revenue |
| |
| | ||
Total operating revenues |
| |
| | ||
OPERATING EXPENSES | ||||||
Depreciation, depletion and amortization |
| |
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Property operating expenses |
| |
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Cost of goods sold | | | ||||
Provision for credit loss allowance | | | ||||
Acquisition and due diligence costs |
| — |
| | ||
General and administrative expenses |
| |
| | ||
Legal and accounting |
| |
| | ||
Other operating expenses | — | | ||||
Total operating expenses |
| |
| | ||
OTHER (INCOME) EXPENSE: | ||||||
Other (income) | ( | ( | ||||
(Income) loss from equity method investment | ( | | ||||
(Gain) loss on disposition of assets, net | | ( | ||||
Interest expense |
| | | |||
Total other expense |
| |
| | ||
Net income before income tax expense | | | ||||
Income tax expense | |
| | |||
NET INCOME |
| |
| | ||
Net (income) attributable to non-controlling interests in operating partnership |
| ( | ( | |||
Net income attributable to the Company | | | ||||
Dividend equivalent rights allocated to performance-based unvested restricted shares | ( | ( | ||||
Nonforfeitable distributions allocated to time-based unvested restricted shares | ( | ( | ||||
Distributions on Series A Preferred Units | ( | ( | ||||
Net income available to common stockholders of Farmland Partners Inc. | $ | | $ | | ||
Basic and diluted per common share data: | ||||||
Basic net income available to common stockholders | $ | $ | ||||
Diluted net income available to common stockholders | $ | $ | ||||
Basic weighted average common shares outstanding |
| |
| | ||
Diluted weighted average common shares outstanding |
| |
| | ||
Dividends declared per common share - regular and special | $ | | $ | | ||
See accompanying notes.
4
Farmland Partners Inc.
Consolidated Statements of Comprehensive Income (Loss)
For the three months ended March 31, 2026 and 2025
(Unaudited)
(in thousands)
For the Three Months Ended | ||||||
March 31, | ||||||
| 2026 | | 2025 | |||
Net income | $ | | $ | | ||
Amortization of other comprehensive income | ( | ( | ||||
Net change associated with current period hedging activities | ( | ( | ||||
Comprehensive income | | | ||||
Comprehensive (income) attributable to non-controlling interests | ( | ( | ||||
Comprehensive income attributable to Farmland Partners Inc. | $ | | $ | | ||
See accompanying notes.
5
Farmland Partners Inc.
Consolidated Statements of Changes in Equity and Other Comprehensive Income
For the three months ended March 31, 2026 (Unaudited)
(in thousands)
Stockholders’ Equity | |||||||||||||||||||||||
Common Stock | Non-controlling | ||||||||||||||||||||||
Additional | Other | Interests in | |||||||||||||||||||||
Paid in | Retained | Cumulative | Comprehensive | Operating | Total | ||||||||||||||||||
| Shares | | Par Value | | Capital | | Earnings | | Dividends | | Income | | Partnership | | Equity | ||||||||
Balance at December 31, 2025 | | $ | | $ | | $ | | $ | ( | $ | | $ | | $ | | ||||||||
Net income | — | — | — | | — | — | | | |||||||||||||||
Grant of unvested restricted stock | | | — | — | — | — | — | | |||||||||||||||
Shares withheld for income taxes on vesting of equity-based compensation | ( | ( | ( | — | — | — | — | ( | |||||||||||||||
Stock-based compensation | — | — | | — | — | — | — | | |||||||||||||||
Dividends accrued and paid | — | — | — | ( | ( | — | ( | ( | |||||||||||||||
Conversion of common units to shares of common stock | | | | — | — | — | ( | — | |||||||||||||||
Net change associated with current period hedging transactions | — | — | — | — | — | ( | — | ( | |||||||||||||||
Common stock repurchased and cancellation of shares | — | — | — | — | — | — | ( | ( | |||||||||||||||
Adjustments to non-controlling interests resulting from changes in ownership of operating partnership | — | — | ( | — | — | — | | — | |||||||||||||||
Balance at March 31, 2026 | | $ | | $ | | $ | | $ | ( | $ | — | $ | | $ | | ||||||||
See accompanying notes.
6
Farmland Partners Inc.
Consolidated Statements of Changes in Equity and Other Comprehensive Income
For the three months ended March 31, 2025 (Unaudited)
(in thousands)
Stockholders’ Equity | |||||||||||||||||||||||
Common Stock | Non-controlling | ||||||||||||||||||||||
Additional | Other | Interests in | |||||||||||||||||||||
Paid in | Retained | Cumulative | Comprehensive | Operating | Total | ||||||||||||||||||
| Shares | | Par Value | | Capital | | Earnings | | Dividends | | Income | | Partnership | | Equity | ||||||||
Balance at December 31, 2024 | | $ | | $ | | $ | | $ | ( | $ | | $ | | $ | | ||||||||
Net income | — | — | — | | — | — | | | |||||||||||||||
Grant of unvested restricted stock | | | — | — | — | — | — | | |||||||||||||||
Shares withheld for income taxes on vesting of equity-based compensation | ( | — | ( | — | — | — | — | ( | |||||||||||||||
Stock-based compensation | — | — | | — | — | — | — | | |||||||||||||||
Dividends accrued and paid | — | — | — | ( | ( | — | ( | ( | |||||||||||||||
Net change associated with current period hedging transactions | — | — | — | — | — | ( | — | ( | |||||||||||||||
Common stock repurchased and cancellation of shares | ( | ( | ( | — | — | — | — | ( | |||||||||||||||
Adjustments to non-controlling interests resulting from changes in ownership of operating partnership | — | — | | — | — | — | ( | — | |||||||||||||||
Balance at March 31, 2025 | | $ | | $ | | $ | | $ | ( | $ | | $ | | $ | | ||||||||
See accompanying notes.
7
Farmland Partners Inc.
Consolidated Statements of Cash Flows
For the three months ended March 31, 2026 and 2025
(Unaudited)
(in thousands)
For the Three Months Ended | ||||||
March 31, | ||||||
| 2026 | | 2025 | |||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||
Net income | $ | | $ | | ||
Adjustments to reconcile net income to net cash and cash equivalents provided by operating activities: | ||||||
Depreciation, depletion and amortization |
| |
| | ||
Amortization of deferred financing fees and discounts/premiums on debt |
| |
| | ||
Amortization of net origination fees related to notes receivable | ( | ( | ||||
Stock-based compensation |
| |
| | ||
(Gain) loss on disposition of assets, net |
| |
| ( | ||
(Income) loss from equity method investment | ( | | ||||
Current and expected credit losses | | | ||||
Amortization of dedesignated interest rate swap | ( | ( | ||||
Losses on modification and extinguishment of debt | | — | ||||
Changes in operating assets and liabilities: | ||||||
(Increase) Decrease in accounts receivable |
| |
| | ||
(Increase) Decrease in interest receivable | ( | ( | ||||
(Increase) Decrease in other assets |
| |
| | ||
(Increase) Decrease in inventory | ( |
| ( | |||
Increase (Decrease) in accrued interest |
| |
| ( | ||
Increase (Decrease) in accrued expenses |
| ( |
| ( | ||
Increase (Decrease) in deferred revenue |
| |
| | ||
Increase (Decrease) in accrued property taxes |
| |
| | ||
Net cash and cash equivalents provided by operating activities |
| |
| | ||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||
Real estate acquisitions |
| — | ( | |||
Real estate and other improvements |
| ( | ( | |||
Distributions from equity method investees | | | ||||
Collections of principal on loans | | | ||||
Issuances of loans and financing receivables | ( | ( | ||||
Proceeds from disposition of assets | | | ||||
Net cash and cash equivalents provided by investing activities |
| |
| | ||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||
Borrowings from mortgage notes payable | | — | ||||
Repayments on mortgage notes payable | ( | ( | ||||
Common stock repurchased | — | ( | ||||
Payment of debt issuance costs | ( | — | ||||
Payment of swap fees | — | ( | ||||
Redemption of Series A preferred units | ( | — | ||||
Redemption of common units | ( | — | ||||
Dividends on common stock | ( | ( | ||||
Shares withheld for income taxes on vesting of equity-based compensation | ( | ( | ||||
Distributions on Series A preferred units | ( | ( | ||||
Distributions to non-controlling interests in operating partnership, common | ( | ( | ||||
Net cash and cash equivalents (used in) financing activities |
| ( |
| ( | ||
Net increase (decrease) in cash and cash equivalents |
| |
| ( | ||
Cash and cash equivalents, beginning of period |
| |
| | ||
Cash and cash equivalents, end of period | $ | | $ | | ||
Cash paid during period for interest | $ | | $ | | ||
Cash paid during period for taxes | $ | — | $ | — | ||
See accompanying notes.
8
Farmland Partners Inc.
Consolidated Statements of Cash Flows (continued)
For the three months ended March 31, 2026 and 2025
(Unaudited)
(in thousands)
For the Three Months Ended | ||||||
March 31, | ||||||
| 2026 | | 2025 | |||
SUPPLEMENTAL NON-CASH INVESTING AND FINANCING TRANSACTIONS: | ||||||
Dividend payable, common stock | $ | | $ | | ||
Dividend payable, common units | $ | | $ | | ||
Distributions payable, Series A preferred units | $ | — | $ | | ||
Additions to real estate improvements included in accrued expenses | $ | | $ | | ||
Origination fees included in notes receivable | $ | — | $ | | ||
Swap fees payable included in accrued interest | $ | — | $ | | ||
Noncash conversion of accrued interest to notes receivable principal | $ | | $ | — | ||
Prepaid property tax liability acquired in acquisitions | $ | — | $ | | ||
Right-of-use assets obtained in exchange for new operating lease liabilities | $ | — | $ | | ||
Conversion of common units to shares of common stock | $ | | $ | — | ||
See accompanying notes.
9
Farmland Partners Inc.
Notes to Consolidated Financial Statements (Unaudited)
Note 1—Organization and Significant Accounting Policies
Organization
Farmland Partners Inc. (“FPI”), collectively with its subsidiaries, is an internally managed real estate company that owns and seeks to acquire high-quality farmland located in agricultural markets throughout North America. FPI was incorporated in Maryland on September 27, 2013. FPI elected to be taxed as a real estate investment trust (“REIT”) under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the “Code”), commencing with its short taxable year ended December 31, 2014.
FPI is the sole member of the sole general partner of Farmland Partners Operating Partnership, LP (the “Operating Partnership”), which was formed in Delaware on September 27, 2013. All of FPI’s assets are held by, and its operations are primarily conducted through, the Operating Partnership and the wholly owned subsidiaries of the Operating Partnership. As of March 31, 2026, FPI owned a
References to the “Company,” “we,” “us,” or “our” mean collectively FPI and its consolidated subsidiaries, including the Operating Partnership.
As of March 31, 2026, the Company owned a portfolio of approximately
On March 16, 2015, the Company formed FPI Agribusiness Inc., a wholly owned subsidiary (the “TRS” or “FPI Agribusiness”), as a taxable REIT subsidiary. We engage directly in farming and provide volume purchasing services to our tenants through the TRS. As of March 31, 2026, the TRS performed direct farming operations on
All references to numbers and percent of acres within this report are unaudited.
Principles of Consolidation
The accompanying consolidated financial statements are presented on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of FPI and the Operating Partnership. All significant intercompany balances and transactions have been eliminated in consolidation. Certain prior year amounts have been reclassified to conform to the presentation used in the current year. Such reclassifications had no effect on net income or total equity.
Interim Financial Information
The information in the accompanying consolidated financial statements of the Company as of March 31, 2026 and for the three months ended March 31, 2026 and 2025 is unaudited. The accompanying consolidated financial statements
10
include adjustments based on management’s estimates (consisting of normal and recurring accruals), which the Company considers necessary for a fair presentation of the results for the periods. The financial information should be read in conjunction with the consolidated financial statements for the year ended December 31, 2025, included in the Company’s Annual Report on Form 10-K, which the Company filed with the U.S. Securities and Exchange Commission (the “SEC”) on February 19, 2026. Operating results for the three months ended March 31, 2026 are not necessarily indicative of actual operating results for the entire year ending December 31, 2026.
The consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the SEC for interim financial statements. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations.
Use of Estimates
The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could materially differ from those estimates for a variety of reasons, including, without limitation, the impacts of public health crises, the wars in Ukraine and Iran and other geopolitical tensions, substantially higher prices for oil and gas, higher prices and/or availability of fertilizer, tariffs or other changes in trade policy and substantially increased interest rates, and their effects on the domestic and global economies. We are unable to quantify the ultimate impact of these factors on our business.
Significant Accounting Policies
There have been no changes to the Company’s significant accounting policies disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.
Liquidity Policy
The Company manages its liquidity position and expected liquidity needs taking into consideration current cash balances, undrawn availability under its lines of credit ($
Accounts Receivable
Accounts receivable are presented at face value, net of the allowance for doubtful accounts. The allowance for doubtful accounts was less than $
Inventory
Inventory consists of costs related to crops grown on farms directly operated by the TRS and is separated into growing crop inventory, harvested crop inventory or general inventory, as appropriate.
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As of March 31, 2026 and December 31, 2025, inventory consisted of the following:
(in thousands) | | March 31, 2026 | | December 31, 2025 | ||
Harvested crop | $ | — | $ | | ||
Growing crop | | | ||||
$ | | $ | | |||
Goodwill and Intangible Assets
During the three months ended March 31, 2026, the Company did
The Company recorded amortization of customer relationships of less than $
Segment Reporting
The majority of the Company’s revenue is derived from owning and managing properties leased to tenants. All assets and operations of the Company are located in the United States. The Company’s chief operating decision makers (“CODMs”) (Paul Pittman, Executive Chairman, and Luca Fabbri, President and Chief Executive Officer) do not evaluate performance on a farm-specific or transactional basis and do not distinguish the Company’s principal business or group its operations on a geographical basis for purposes of measuring performance. Accordingly, the Company has identified a operating segment which is the entire entity for reporting purposes in accordance with GAAP and no aggregation of segments is required.
The CODMs assess performance and make decisions regarding the allocation of resources on a consolidated basis using Adjusted Funds from Operations (“AFFO”) and AFFO per share. The CODMs use AFFO and AFFO per share to monitor budget versus actual results and evaluate performance of the segment in deciding whether to repay indebtedness, repurchase shares, fund and maintain our assets and operations, acquire new properties that we believe are accretive to long-term value creation, make distributions to our stockholders and unitholders, and fund other general business needs.
As the operating segment is the Company in its entirety and the accounting policies for this segment are the same as the Company’s accounting policies described above, there are no differences between the measurements of the Company’s single operating segment and the consolidated financial statements. Therefore, information about the profit or loss, assets, investments, expenditures and all other significant items of the Company’s single reportable segment can be found on the Company’s consolidated financial statements or in the reconciliation of net income (loss) to AFFO and AFFO per share below. In addition, there are no changes from prior periods in the measurement methods used to determine segment information.
12
The following table sets forth a reconciliation of net income (loss) to FFO, AFFO and net income (loss) available to common stockholders per share to AFFO per share, fully diluted, the most directly comparable GAAP equivalents, respectively, for the periods indicated below:
For the three months ended March 31, | ||||||
(in thousands except per share amounts) | | 2026 | | 2025 | ||
Net income | $ | | $ | | ||
(Gain) loss on disposition of assets, net | | ( | ||||
Depreciation, depletion and amortization |
| | | |||
FFO (1) | $ | | $ | | ||
Stock-based compensation |
| | | |||
Real estate related acquisition and due diligence costs | — | | ||||
Distributions on Series A Preferred Units | ( | ( | ||||
AFFO (1) | $ | | $ | | ||
AFFO per diluted weighted average share data: | ||||||
AFFO weighted average common shares |
| |
| | ||
Net income available to common stockholders of Farmland Partners Inc. | $ | $ | ||||
Income available to redeemable non-controlling interest and non-controlling interest in operating partnership |
|
| ||||
Depreciation, depletion and amortization |
|
| ||||
Stock-based compensation |
|
| ||||
(Gain) loss on disposition of assets, net | ( | |||||
Distributions on Series A Preferred Units |
| ( | ||||
AFFO per diluted weighted average share (1) | $ | $ | | |||
| (1) | The three months ended March 31, 2025 and 2026 included approximately $ |
For more information about the Company’s revenue disaggregated by source and major customers, please refer to Note 2—Revenue Recognition and Note 3—Concentration Risk, respectively.
Recently Issued Accounting Standards
The FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures: Disaggregation of Income Statement Expenses (Subtopic 220-40) in November 2024. The purpose of the ASU is to improve the disclosures about an entity’s expenses and to address requests from investors for more transparent information about certain types of expenses (including purchases of inventory, employee compensation, depreciation, intangible asset amortization, and depletion) included within expense captions presented on the face of the income statement (such as cost of sales, SG&A, and research and development). The new standard requires these disclosures to be presented in tabular format within the notes to the financial statements and does not change the requirements for the presentation of expenses on the face of the income statement. The ASU is effective for public business entities for annual periods beginning after December 15, 2026. The Company is in the process of assessing the effect of this update on the consolidated financial statement disclosures.
Note 2—Revenue Recognition
Fixed Rent: The majority of the Company’s leases provide for rent payments on an entirely or partially fixed basis. For the majority of its fixed farm rent leases, the Company receives at least
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periods when a tenant: (1) may not terminate its lease obligation early; (2) may terminate its lease obligation early in exchange for a fee or penalty that the Company considers material enough such that termination would not be probable; (3) possesses renewal rights and the tenant’s failure to exercise such rights imposes a penalty on the tenant material enough such that renewal appears reasonably certain; or (4) possesses bargain renewal options for such periods. Payments received in advance are included in deferred revenue until they are earned.
Variable Rent: Certain of the Company’s leases provide for a rent payment determined as a percentage of the gross farm proceeds in their entirety or above a certain threshold. Revenue under leases providing for variable rent may be recorded at the guaranteed crop insurance minimums and recognized ratably over the lease term during the crop year. Upon notification from the grain or packing facility that a future contract for delivery of the harvest has been finalized or when the tenant has notified the Company of the total amount of gross farm proceeds, revenue is recognized for the excess of the actual gross farm proceeds and the previously recognized minimum guaranteed insurance.
Fixed Rent and Variable Rent: Certain of the Company’s leases provide for a minimum fixed rent plus variable rent based on gross farm revenue.
The following table presents rental income that is disaggregated by revenue source for the three months ended March 31, 2026 and 2025:
For the three months ended | ||||||
March 31, | ||||||
(in thousands) | | 2026 | | 2025 | ||
Fixed Farm Rent | $ | | $ | | ||
Solar, Wind and Recreation Rent | | | ||||
Tenant Reimbursements |
| |
| | ||
Variable Rent |
| — |
| — | ||
$ | | $ | | |||
The Company’s leases generally have terms ranging from to
The majority of the Company’s revenue is derived from rental income. The Company elected an accounting policy to account for both its lease and non-lease components (specifically, tenant reimbursements) as a single lease component under Accounting Standards Codification (“ASC”) 842, Lease Accounting.
The following sets forth a summary of rental income recognized during the three months ended March 31, 2026 and 2025:
Rental income recognized | ||||||
For the three months ended | ||||||
March 31, | ||||||
(in thousands) | | 2026 | | 2025 | ||
Leases in effect at the beginning of the year | $ | | $ | | ||
Leases entered into during the year |
| |
| | ||
$ | | $ | | |||
14
Future minimum fixed rent payments from tenants under all non-cancelable leases in place as of March 31, 2026, including lease advances when contractually due, but excluding crop share and tenant reimbursement of expenses, for the remainder of 2026 and each of the next four years and thereafter as of March 31, 2026 are as follows:
(in thousands) | | Future rental | ||||
Year Ending December 31, | payments | |||||
2026 (remaining nine months) | $ | | ||||
2027 | | |||||
2028 | | |||||
2029 |
| | ||||
2030 | | |||||
Thereafter | | |||||
$ | | |||||
Since lease renewal periods are exercisable at the option of the lessee, the preceding table presents future minimum lease payments due during the initial lease term only.
Crop Sales: For farms directly operated through the TRS, the Company records revenue from the sale of harvested crops when the harvested crop has been contracted to be delivered to a grain or packing facility and title has transferred. Revenues from the sale of harvested crops recognized were $
Other Revenue: Other revenue includes crop insurance proceeds, auction fees, brokerage fees, interest income, and property management income. In November 2025, the Company sold Murray Wise Associates, LLC (“MWA”) to a third party, and therefore no longer provide auction, brokerage and property management services. Crop insurance proceeds are recognized when the amount is determinable and collectible. Crop insurance proceeds are generally received in lieu of crop sales on farms directly operated through the TRS. The Company generated auction revenue by contracting with a real estate owner to market and auction farm property. Successful bidders signed a purchase agreement immediately following the auction. Auction fee revenue was recognized upon completion of the auction. The Company generated real estate brokerage commissions by acting as a broker for real estate investors or owners seeking to buy or sell farm property. Revenue from brokerage fees was recognized upon completion of the transaction. Property management revenue was recognized over the term of the contract as services were being provided. The Company collected property management fees in advance of the commencement of property management activities on behalf of third parties and included them in deferred revenue until they were earned over the life of the contract. Interest income is recognized on loans and financing receivables on an accrual basis over the life of the loans. Direct origination costs are netted against loan origination fees and are amortized over the life of the note using the straight-line method, which approximates the effective interest method, as an adjustment to interest income which is included as a component of other revenue in the Company’s Consolidated Statements of Operations for the three months ended March 31, 2026 and 2025.
The following table presents other revenue that is disaggregated by revenue source for the three months ended March 31, 2026 and 2025:
For the three months ended | ||||||
March 31, | ||||||
(in thousands) | | 2026 | | 2025 | ||
Auction and brokerage fees | $ | — | $ | | ||
Crop insurance proceeds | | | ||||
Property management income |
| — |
| | ||
Interest income | |
| | |||
Amortization of points income | | | ||||
Other |
| |
| | ||
$ | | $ | | |||
15
Note 3—Concentration Risk
Credit Risk
Revenue for the three months ended March 31, 2026 is not necessarily indicative of actual revenue for the entire year ending December 31, 2026. The Company receives a significant portion of its variable rental payments in the fourth quarter of each year, typically resulting in at least one tenant concentration of 10% or greater of revenue in that quarter and for the year. If a significant tenant, representing a tenant concentration, fails to make rental payments to the Company or elects to terminate its leases, and the land cannot be re-leased on satisfactory terms, there may be a material adverse effect on the Company’s financial performance. For the three months ended March 31, 2026 and 2025, the Company had tenant concentrations of 10% or greater of rental income, as presented in the table below.
Rental income recognized | Approximate % of rental income | |||||||||||
For the three months ended March 31, | For the three months ended March 31, | |||||||||||
($ in thousands) | 2026 | 2025 | | 2026 | 2025 | |||||||
Tenant A | $ | | $ | | | % | | % | ||||
Tenant B | $ | | $ | | | % | | % | ||||
Tenant C | $ | | $ | | | % | | % | ||||
Geographic Risk
The following table summarizes the percentage of approximate total acres owned as of March 31, 2026 and 2025, and the fixed and variable rent recorded by the Company for the three months ended March 31, 2026 and 2025 by location of the farm:
Approximate % | Rental Income (1) | |||||||||||
of total acres | For the three months ended | |||||||||||
As of March 31, | March 31, | |||||||||||
Location of Farm (2) | | 2026 | | 2025 | | 2026 | | 2025 |
| |||
Corn Belt | | % | | % | | % | | % | ||||
Delta and South | | % | | % | | % | ( | % | ||||
High Plains | | % | | % | | % | | % | ||||
Southeast | | % | | % | | % | | % | ||||
West Coast | | % | | % | | % | | % | ||||
| % | | % | | % | | % | |||||
(1) | Due to regional disparities in the use of leases with variable rent and seasonal variations in the recognition of variable rent revenue, regional comparisons by rental income are not fully representative of each region’s income-producing capacity until a full year is taken into account. |
(2) | Corn Belt includes farms located in Illinois, Indiana, Missouri and eastern Nebraska. Delta and South includes farms located in Arkansas and Louisiana. High Plains includes farms located in Colorado and Texas. Southeast includes farms located in South Carolina and West Virginia. West Coast includes farms located in California. |
Note 4—Related Party Transactions
The Company did not have any related party transactions during the three months ended March 31, 2026 and 2025.
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Note 5—Real Estate
During the three months ended March 31, 2026, the Company had
During the three months ended March 31, 2025, the Company completed acquisitions consisting of
During the three months ended March 31, 2026, the Company completed the disposition of
During the three months ended March 31, 2025, the Company completed dispositions consisting of
During the three months ended March 31, 2026 and 2025, the Company incurred an immaterial amount of costs related to acquisitions and due diligence.
Note 6—Loans and Financing Receivables
The Company offers a loan program (the “FPI Loan Program”) pursuant to which the Company makes loans to landowners with whom we have established relationships and third-party farmers (both tenant and non-tenant) to provide financing for business operations, property acquisitions, working capital requirements, operational farming activities, farming infrastructure projects and non-farming business needs. The Company seeks to make loans that are collateralized by farm and non-farm real estate, crops (growing or stored), agricultural equipment and/or other collateral and in principal amounts of $
In addition to loans made under the FPI Loan Program, the Company, on certain occasions, makes short-term loans to tenants secured by collateral other than real estate, such as growing crops, equipment or inventory, when the Company believes such loans will ensure the orderly completion of farming operations on a property owned by the Company for a given crop year and other credit is not available to the borrower.
On November 18, 2022, the Company acquired land and buildings for
On December 18, 2024, the Company purchased a property in West Virginia in a sale leaseback transaction containing a repurchase option. The Company determined that the repurchase option is reasonably certain to be exercised and, therefore, the transaction meets the definition of a sales type-lease and is accounted for as a financing arrangement. The lease matures on December 31, 2029. The discount rate used for the transaction was
On December 5, 2025 the Company acquired a property in Virginia in a sale leaseback transaction. The transaction meets the definition of a sales type-lease and is accounted for as a financing arrangement under ASC 310, Receivables, as a result of a repurchase obligation. The original lease matured in April 2026; however, on March 31, 2026, the Company executed an extension of the lease term through December 31, 2026. The discount rate used for the transaction was
17
As of March 31, 2026 and December 31, 2025, the Company held the following loans and financing receivables:
($ in thousands) | Outstanding as of | Maturity | ||||||||||||
Loan | | Terms | | March 31, 2026 | | December 31, 2025 | | Date | ||||||
Loans under FPI Loan Program: | ||||||||||||||
Mortgage Note (1) | Principal due at maturity & interest due quarterly | $ | | $ | | 3/4/2027 | ||||||||
Mortgage Note (2) | Principal due at maturity & interest due quarterly | | | 11/17/2028 | ||||||||||
Mortgage Note (3) (10) | Principal due at maturity & interest due monthly | | | 12/31/2026 | ||||||||||
Mortgage Note (3) (10) | Principal due at maturity & interest due monthly | | | 12/31/2026 | ||||||||||
Mortgage Note (3) (10) | Principal due at maturity & interest due monthly | | | 12/31/2026 | ||||||||||
Mortgage Note (4) | Principal due at maturity & interest due monthly | | | 6/15/2026 | ||||||||||
Mortgage Note (5) | Principal due at maturity & interest due quarterly | | | 4/1/2027 | ||||||||||
Mortgage Note (6) | Principal due at maturity & interest due monthly | | | 11/15/2030 | ||||||||||
Mortgage Note (3) | Principal & interest due at maturity | | | 12/31/2026 | ||||||||||
Total outstanding principal | | | ||||||||||||
Sale-leaseback transactions accounted for as financing arrangements: | ||||||||||||||
Financing Receivable, net (7) | Monthly payments in accordance with lease agreement | | | 11/17/2037 | ||||||||||
Financing Receivable, net (7) | Monthly payments in accordance with lease agreement | | | 11/17/2037 | ||||||||||
Financing Receivable, net (7) | Monthly payments in accordance with lease agreement | | | 11/17/2037 | ||||||||||
Financing Receivable, net (7) | Monthly payments in accordance with lease agreement | | | 11/17/2037 | ||||||||||
Financing Receivable, net (8) | Monthly payments in accordance with lease agreement | | | 12/31/2029 | ||||||||||
Financing Receivable, net (9) (10) | Monthly payments in accordance with lease agreement | | | 4/4/2026 | ||||||||||
Total financing receivable | | | ||||||||||||
Interest receivable (net of unamortized points) | ( | ( | ||||||||||||
Allowance for credit losses | ( | ( | ||||||||||||
Provision for interest receivable | — | — | ||||||||||||
Total Loans and financing receivables, net | $ | | $ | | ||||||||||
| (1) | On March 3, 2022, the Company entered into |
| (2) | On November 17, 2023, the Company entered into a loan agreement secured by farmland in connection with a property disposition. |
| (3) | On October 29, 2024, December 20, 2024, and April 17, 2025, the Company entered into loan agreements with the same party secured against certain properties. On December 5, 2025, the Company amended the existing loans and entered into an additional loan agreement. |
| (4) | On February 4, 2025, the Company entered into a loan agreement secured by farmland in connection with a property disposition. |
| (5) | On March 28, 2025, the Company entered into a loan agreement secured by farmland. |
| (6) | On November 15, 2025, the Company entered into a loan agreement whereby the Company has a security interest in all revenues and other amounts under certain contracts in connection with the disposition of MWA. |
| (7) | On November 18, 2022, the Company acquired land and buildings for |
| (8) | On December 18, 2024, the Company entered into a sale leaseback transaction accounted for as a financing transaction, with a lease term of |
| (9) | On December 5, 2025 the Company entered into a sale leaseback transaction accounted for as a financing transaction. The lease expired in April 2026; however, on March 31, 2026, the Company executed an extension of the lease term through December 31, 2026. |
| (10) | Effective March 31, 2026, the Company amended the loan agreement whereby past due interest and rent was converted into principal. |
Loans and financing receivables are stated at their unpaid principal balance and include unamortized direct origination costs and accrued interest through the reporting date, less any allowance for losses and unamortized borrower paid points. The Company monitors its receivables based upon historical collection experience, collateral values, current trends, long-term probability of default (“PD”) and estimated loss given default (“LGD”). Accrued interest write-offs are recognized as credit loss expense. During the three months ended March 31, 2026, accrued interest on
18
The following tables detail the allowance for credit losses as of March 31, 2026 and December 31, 2025:
March 31, 2026 | |||||||||||||
($ in thousands) | Amortized Cost | Allowance | Loans and financing | Allowance as a % | |||||||||
Loans under FPI Loan Program | $ | | $ | ( | $ | | | % | |||||
Financing Receivables | | ( | | | % | ||||||||
Totals | $ | | $ | ( | $ | | | % | |||||
December 31, 2025 | |||||||||||||
($ in thousands) | Amortized Cost | Allowance | Loans and financing | Allowance as a % | |||||||||
Loans under FPI Loan Program | $ | | $ | ( | $ | | | % | |||||
Financing Receivables | | ( | | | % | ||||||||
Totals | $ | | $ | ( | $ | | | % | |||||
The following chart reflects the roll-forward of the allowance for credit losses for our loans and financing receivables for the three months ended March 31, 2026 and 2025:
Three months ended March 31, | ||||||||||||
($ in thousands) | 2026 | 2025 | ||||||||||
Balance at beginning of period | $ | ( | $ | ( | ||||||||
Initial allowance for financing receivables | — | — | ||||||||||
Initial allowance for loan receivables | — | ( | ||||||||||
Current period change in credit allowance | ( | — | ||||||||||
Charge-offs | — | — | ||||||||||
Recoveries | | — | ||||||||||
Balance at end of period | $ | ( | $ | ( | ||||||||
The collateral for the mortgage notes receivable consists of real estate and personal property.
The Company estimates the fair value of loans and financing receivables using Level 3 inputs under the hierarchy established by GAAP. Fair value is estimated by discounting cash flows using interest rates based on management’s estimates of market interest rates on loans receivable with comparable terms and credit risk whenever the interest rates on the loans receivable are deemed not to be at market rates. The fair value for financing receivables does not take into consideration any residual value upon the end of the lease term. As of March 31, 2026 and December 31, 2025, the estimated fair value of the loans and financing receivables was $
19
Note 7—Mortgage Notes, Lines of Credit and Bonds Payable
As of March 31, 2026 and December 31, 2025, the Company had the following indebtedness outstanding:
Book | |||||||||||||||||||
Annual | Value of | ||||||||||||||||||
($ in thousands) | Interest | Principal | Collateral | ||||||||||||||||
Rate as of | Next | Outstanding as of | as of | ||||||||||||||||
Interest | March 31, | Interest Rate | Adjustment | March 31, | December 31, | Maturity | March 31, | ||||||||||||
Loan | | Payment Terms | | 2026 | | Terms | | Date | | 2026 | | 2025 | | Date | | 2026 | |||
Farmer Mac Facility | Monthly | SOFR + | N/A | $ | | $ | — | December 2028 | | ||||||||||
MetLife Term Loan #1 | Semi-annual | Fixed for | February 2029 | | | February 2036 | | ||||||||||||
MetLife Term Loan #4 | Semi-annual | Fixed for | N/A | | | June 2026 | | ||||||||||||
MetLife Term Loan #5 | Semi-annual | Fixed for | N/A | | | January 2027 | | ||||||||||||
MetLife Term Loan #6 | Semi-annual | Fixed for | N/A | | | February 2027 | | ||||||||||||
MetLife Term Loan #7 | Semi-annual | Fixed for | June 2026 | | | June 2027 | | ||||||||||||
MetLife Term Loan #8 | Semi-annual | Fixed for | December 2027 | | | December 2042 | | ||||||||||||
MetLife Term Loan #9 | Semi-annual | Fixed for | May 2027 | | | May 2028 | | ||||||||||||
MetLife Term Loan #10 | Semi-annual | Fixed | N/A | | | October 2030 | | ||||||||||||
MetLife Facility | Quarterly | SOFR + | N/A | — | — | October 2027 | | ||||||||||||
Rabobank (1) | Semi-annual | SOFR + | N/A | | | March 2028 | | ||||||||||||
Rutledge Facility | Quarterly | SOFR + | N/A | — | — | February 2027 | | ||||||||||||
Total outstanding principal | | | $ | | |||||||||||||||
Debt issuance costs | ( | ( | |||||||||||||||||
Unamortized premium | — | — | |||||||||||||||||
Total mortgage notes and bonds payable, net | $ | | $ | | |||||||||||||||
| (1) | The Company had an interest rate swap agreement with Rabobank for $ |
Farmer Mac Debt
The Operating Partnership has a bond purchase agreement entered into in October 2022 and amended in December 2025 (the “Farmer Mac Facility”) with Federal Agricultural Mortgage Corporation and its wholly owned subsidiary, Farmer Mac Mortgage Securities Corporation (collectively, “Farmer Mac”). As of March 31, 2026 and December 31, 2025, there was approximately $
MetLife Debt
As of each of March 31, 2026 and December 31, 2025, the Company had $
The Company also has a credit facility with MetLife that provides the Company with access to additional liquidity on a revolving credit basis at a floating rate of interest equal to three-month term plus
20
“MetLife Facility”). As of March 31, 2026, the Company was in compliance with all covenants under the MetLife credit agreements and MetLife guarantees.
On each adjustment date for MetLife Term Loans #1 and 4-9, MetLife may, at its option, adjust the rate of interest to any rate of interest determined by MetLife consistent with rates for substantially similar loans secured by real estate substantially similar to the collateral. At the time of rate adjustment, the Company may make a prepayment equal to the unpaid principal balance for each of the MetLife loans. Otherwise, the Company may make a prepayment equal to
Rabobank Mortgage Note
As of each of March 31, 2026 and December 31, 2025, the Company and the Operating Partnership had $
Rutledge Facility
As of each of March 31, 2026 and December 31, 2025, the Company and the Operating Partnership had
The interest rate for the Rutledge Facility is based on three-month plus
In connection with the Rutledge agreement, the Company and the Operating Partnership each entered into separate guarantees whereby the Company and the Operating Partnership jointly and severally agreed to unconditionally guarantee the obligations under the Rutledge Facility (the “Rutledge guarantees”). The Rutledge guarantees contain a number of customary affirmative and negative covenants. As of March 31, 2026, the facility size was $
Debt Issuance Costs
The Company incurred $
21
Aggregate Maturities
As of March 31, 2026, aggregate maturities of long-term debt for the succeeding years are as follows:
($ in thousands) | ||||||||||||
Year Ending December 31, | | Future Maturities |
| |||||||||
2026 (remaining nine months) | $ | | ||||||||||
2027 | | |||||||||||
2028 | | |||||||||||
2029 |
| — | ||||||||||
2030 | | |||||||||||
Thereafter | | |||||||||||
$ | | |||||||||||
Fair Value
The fair value of the mortgage notes payable is valued using Level 3 inputs under the hierarchy established by GAAP and is calculated based on a discounted cash flow analysis, using interest rates based on management’s estimates of market interest rates on long-term debt with comparable terms whenever the interest rates on the mortgage notes payable are deemed not to be at market rates. As of March 31, 2026 and December 31, 2025, the estimated fair value of the mortgage notes was $
Note 8—Commitments and Contingencies
Office Leases
As of March 31, 2026, the Company had
($ in thousands) | | Future rental |
| |
Year Ending December 31, | payments |
| ||
2026 (remaining nine months) | $ | | ||
2027 | | |||
2028 | — | |||
2029 | — | |||
2030 |
| — | ||
Thereafter | — | |||
Total lease payments | | |||
Less: imputed interest | ( | |||
Lease liability | $ | | ||
Litigation
In the ordinary course of business, the Company is subject to various litigation, claims and assessments. The total outstanding claims against the Company are an aggregate of $
On July 2, 2021, the Company filed a complaint against First Sabrepoint Capital Management, LP, Sabrepoint Capital Partners, LP, Sabrepoint Capital Participation, LP, George Baxter, and Donald Marchiony (collectively, “Sabrepoint”) in the Civil District Courts of Dallas County, Texas seeking relief for their role, as alleged in the complaint, in the previously
22
disclosed 2018 “short and distort” scheme to profit from an artificial decline in our stock price. Certain Sabrepoint defendants had prevailed previously on a motion to dismiss the case against them in the Rota Fortunae action in the United States District Court for the District of Colorado (where the state case had been removed) solely on personal jurisdiction grounds. On December 17, 2021, the Company's claims against Sabrepoint in Texas were dismissed by the trial court, which granted (i) Sabrepoint's motion for summary judgment on collateral estoppel grounds, and (ii) motion to dismiss pursuant to the Texas Citizens Participation Act (“TCPA”). On March 21, 2022, after the Company filed a notice signaling an intent to appeal both orders, the Court of Appeals for the Fifth District of Texas (the “Court of Appeals”) entered an order declaring the trial court's TCPA order “VOID because the motion was denied by operation of law….” Accordingly, the Company narrowed its appeal to the trial court's grant of summary judgment. On January 26, 2022, Sabrepoint filed a motion for attorney's fees relating to the defense of that action. The trial court granted the motion for certain fees claimed by Sabrepoint as relating to its pursuit of its TCPA motion, but as noted above, the Court of Appeals subsequently overturned the TCPA order that formed the basis of Sabrepoint’s fee request, mooting the motion and the Court’s order on the same. On June 30, 2023, the Court of Appeals granted the Company’s appeal, determining that the Company’s claims against Sabrepoint are not barred, reversing the trial court and remanding the case for further proceedings on the merits. On October 13, 2023, Sabrepoint filed a Petition for Review with the Texas Supreme Court, requesting the court to review the Court of Appeals’ decision. The Company filed a response to the Sabrepoint Petition for Review with the Texas Supreme Court on December 27, 2023. Sabrepoint filed a reply in support of its petition on January 25, 2024, and on February 16, 2024, the court requested a briefing on the merits. On January 16, 2025, the Texas Supreme Court held oral arguments, and on April 25, 2025 the court issued an order affirming the Texas Court of Appeals’ decision that the Company’s claims are not barred under the doctrine of collateral estoppel, and remanding the case to the Court of Appeals for further briefing with respect to Sabrepoint’s TCPA motion. On October 20, 2025, the Company filed its petition with the Texas Court of Appeals, and on January 20, 2026 Sabrepoint filed its response. The parties are awaiting further action by the Texas Court of Appeals. The Company believes that the Texas Court of Appeals may resolve the remaining issues in its favor and that the Company will ultimately be permitted to proceed with its claims against Sabrepoint before the trial court; however, there can be no assurance as to the outcome of these proceedings.
Repurchase Options
For certain of the Company’s acquisitions, the seller retains the option to repurchase the property at a future date for a price, which is calculated based on an appreciation factor over the original purchase price plus the value of improvements on the property, that, at the time of the acquisition, the Company expected would be at or above the property’s fair market value at the exercise date. As of March 31, 2026, the Company had an approximate aggregate net book value of $
Employee Retirement Plan
The FPI 401(k) Plan is a defined contribution plan for substantially all employees. The Company has elected a “safe harbor” plan in which the Company plans to make contributions which are determined and authorized by the Company’s Board of Directors (the “Board of Directors”) each plan year. As is customary, the Company retains the right to amend the FPI 401(k) Plan at its discretion. The Company had an accrued liability for safe harbor contributions of $
Note 9—Stockholders’ Equity and Non-controlling Interests
Non-controlling Interest in Operating Partnership
FPI consolidates the Operating Partnership. As of March 31, 2026 and December 31, 2025, FPI owned
23
Common Units in Operating Partnership, OP Units
On or after the 12-month anniversary of becoming a holder of Common units, unless the terms of an agreement with such Common unitholder dictate otherwise, each limited partner, other than the Company, has the right, subject to the terms and conditions set forth in the Second Amended and Restated Agreement of Limited Partnership of the Operating Partnership, as amended (the “Partnership Agreement”), to tender for redemption all or a portion of such Common units in exchange for cash, or in the Company’s sole discretion, for shares of the Company’s common stock on a
If the Company gives the limited partners notice of its intention to make an extraordinary distribution of cash or property to its stockholders or effect a merger, a sale of all or substantially all of its assets or any other similar extraordinary transaction, each limited partner may exercise its right to tender its Common units for redemption, regardless of the length of time such limited partner has held its Common units.
Regardless of the rights described above, the Operating Partnership will not have an obligation to issue cash to a unitholder upon a redemption request if the Company elects to redeem Common units for shares of common stock. When a Common unit is redeemed, non-controlling interest in the Operating Partnership is reduced, and stockholders’ equity is increased.
The Operating Partnership intends to continue to make distributions on each Common unit in the same amount as those paid on each share of FPI’s common stock, with the distributions on the Common units held by FPI being utilized to pay dividends to FPI’s common stockholders.
Pursuant to the consolidation accounting standard with respect to the accounting and reporting for non-controlling interest changes and changes in ownership interest of a subsidiary, changes in the parent’s ownership interest when the parent retains controlling interest in the subsidiary should be accounted for as equity transactions. The carrying amount of the non-controlling interest shall be adjusted to reflect the change in its ownership interest in the subsidiary, with the offset to equity attributable to the parent. Changes in the ownership percentages between the Company’s stockholders’ equity and non-controlling interest in the Operating Partnership resulted in an increase and a decrease to the non-controlling interest in the Operating Partnership by $
Redeemable Non-Controlling Interests in Operating Partnership, Series A Preferred Units
On March 2, 2016, the sole general partner of the Operating Partnership entered into Amendment No. 1 (the “Amendment”) to the Partnership Agreement in order to provide for the issuance, and the designation of the terms and conditions, of the Series A preferred units. Pursuant to the Amendment, among other things, each Series A preferred unit has a $
24
On or after February 10, 2026 (the “Conversion Right Date”), holders of the Series A preferred units have the right to convert each Series A preferred unit into a number of Common units equal to (i) the $
On or after February 10, 2021, but prior to the Conversion Right Date, the Operating Partnership has the right to redeem some or all of the Series A preferred units, at any time and from time to time, for cash in an amount per unit equal to the $
In the event of a Termination Transaction (as defined in the Partnership Agreement) prior to conversion, holders of the Series A preferred units generally have the right to receive the same consideration as holders of Common units and common stock, on an as-converted basis.
Holders of the Series A preferred units have no voting rights except with respect to (i) the issuance of partnership units of the Operating Partnership senior to the Series A preferred units as to the right to receive distributions and upon liquidation, dissolution or winding up of the Operating Partnership, (ii) the issuance of additional Series A preferred units and (iii) amendments to the Partnership Agreement that materially and adversely affect the rights or benefits of the holders of the Series A preferred units.
The Series A preferred units are accounted for as mezzanine equity on the consolidated balance sheet as the units are convertible and redeemable for shares at a determinable price and date at the option of the holder upon the occurrence of an event not solely within the control of the Company.
The following table summarizes the changes in our redeemable non-controlling interest in the Operating Partnership for the three months ended March 31, 2026 and 2025:
Series A Preferred Units | ||||||
Redeemable | Redeemable | |||||
Preferred | non-controlling | |||||
(in thousands) | | units | | interests | ||
Balance at December 31, 2024 | | $ | | |||
Distribution paid to non-controlling interest | — | ( | ||||
Accrued distributions to non-controlling interest | — | | ||||
Redemption of Series A preferred units | — | — | ||||
Balance at March 31, 2025 | | $ | | |||
Balance at December 31, 2025 | | $ | | |||
Distribution paid to non-controlling interest | — | ( | ||||
Accrued distributions to non-controlling interest | — | — | ||||
Redemption of Series A preferred units | ( | ( | ||||
Balance at March 31, 2026 | — | $ | — | |||
25
Distributions
The Company’s Board of Directors declared and paid the following distributions to common stockholders and holders of Common units for the three months ended March 31, 2026 and 2025:
Fiscal Year | | Declaration Date | Record Date | | Payment Date | | Distributions | ||||
2026 | $ | | |||||||||
$ | | ||||||||||
$ | | ||||||||||
2025 | $ | | |||||||||
$ | | ||||||||||
$ | | ||||||||||
In general, common stock cash dividends declared by the Company will be considered ordinary income to stockholders for income tax purposes. From time to time, a portion of the Company’s dividends may be characterized as qualified dividends, capital gains or return of capital.
In connection with the February 2026 redemption of all remaining outstanding Series A preferred units, there were
Share Repurchase Program
On March 15, 2017, the Company’s Board of Directors approved a program to repurchase up to $
During the three months ended March 31, 2026, the Company repurchased
Equity Incentive Plan
On May 7, 2025, the Company’s stockholders approved the Fourth Amended and Restated 2014 Equity Incentive Plan (as amended and restated, the “Plan”), which increased the aggregate number of shares of the Company’s common stock reserved for issuance under the Plan to approximately
26
The Company may issue equity-based awards to officers, non-employee directors, employees, independent contractors and other eligible persons under the Plan. The Plan provides for the grant of stock options, share awards (including restricted stock and restricted stock units), stock appreciation rights, dividend equivalent rights, performance awards, annual incentive cash awards and other equity-based awards, including LTIP units, which are convertible on a
From time to time, the Company may award time-based and performance-based restricted shares of its common stock under the Plan, as compensation to officers, employees, non-employee directors and non-employee consultants. The shares of restricted stock vest generally over a period of time and/or upon the achievement of certain performance conditions, as applicable, as determined by the compensation committee of the Company’s Board of Directors at the date of grant. Performance-based restricted shares are based upon the Company’s total shareholder return measured on an absolute basis, and relative to an index, and are subject to continued employment. The number of shares of common stock that may be ultimately earned following the end of the cumulative performance period ranges from
A summary of the non-vested restricted shares as of March 31, 2026 and 2025 is as follows:
Time-based | Performance-based | ||||||||||
Weighted | Weighted | ||||||||||
Number of | average grant | Number of | average grant | ||||||||
(shares in thousands) | | shares | | date fair value | | shares | | date fair value | |||
Unvested at December 31, 2024 |
| | $ | |
| | $ | | |||
Granted |
| | |
| | | |||||
Vested |
| ( | |
| — | — | |||||
Forfeited |
| — | — |
| — | — | |||||
Unvested at March 31, 2025 |
| | $ | |
| | $ | | |||
Unvested at December 31, 2025 |
| | $ | |
| | $ | | |||
Granted |
| | |
| | | |||||
Vested |
| ( | |
| — | — | |||||
Forfeited |
| — | — |
| — | — | |||||
Unvested at March 31, 2026 |
| | $ | |
| | $ | | |||
The grant-date fair values of performance-based restricted shares were based on specified absolute and relative total stockholder return goals measured over a
The Company recognized stock-based compensation expense related to restricted stock awards of $
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At-the-Market Offering Program
On May 6, 2022, the Company entered into equity distribution agreements under which the Company was able to issue and sell from time to time, through sales agents, shares of its common stock having an aggregate gross sales price of up to $
Deferred Offering Costs
Deferred offering costs include incremental direct costs incurred by the Company in connection with proposed or actual offerings of securities. At the completion of a securities offering, the deferred offering costs are charged ratably as a reduction of the gross proceeds of equity as stock is issued. If an offering is abandoned, the previously deferred offering costs will be charged to operations in the period in which the offering is abandoned. The Company incurred
Earnings (Loss) per Share
The computation of basic and diluted earnings (loss) per share is shown below. Diluted earnings (loss) per share includes the impact of unvested restricted shares and Series A preferred units, if dilutive.
For the three months ended | ||||||
March 31, | ||||||
(in thousands, except per share amounts) | | 2026 | | 2025 | ||
Numerator for net income per share - basic: | ||||||
Net income available to common stockholders of Farmland Partners Inc. | $ | | $ | | ||
Numerator for net income per share - diluted: | ||||||
Net income available to common stockholders of Farmland Partners Inc. | $ | | $ | | ||
Dividend equivalent rights allocated to performance-based unvested restricted shares | — | — | ||||
Nonforfeitable distributions allocated to time-based unvested restricted shares | — | — | ||||
Distributions on Series A preferred units | — | — | ||||
Numerator for net income per share - diluted: | $ | | $ | | ||
Denominator: | ||||||
Weighted-average number of common shares - basic | | | ||||
Unvested time-based restricted shares | — |
| — | |||
Unvested performance-based restricted shares | — |
| — | |||
Redeemable non-controlling interest |
| — |
| — | ||
Weighted-average number of common shares - diluted (1) |
| |
| | ||
Income per share attributable to common stockholders - basic | $ | $ | ||||
Income per share attributable to common stockholders - diluted | $ | $ | ||||
| (1) | The limited partners’ outstanding Common units, or the non-controlling interests, (which may be redeemed for shares of common stock) have not been included in the diluted earnings per share calculation as there would be no effect on the amounts since the limited partners’ share of income would also be added back to net income, therefore increasing both net income and shares. The weighted average number of Common units held by the non-controlling interest was |
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Numerator:
Unvested shares of the Company’s restricted common stock are considered participating securities, which requires the use of the two-class method for the computation of basic and diluted earnings per share. Unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and shall be included in the computation of earnings per share pursuant to the two-class method. Accordingly, distributed and undistributed earnings attributable to unvested restricted shares (participating securities) may be subtracted, as applicable, from net income or loss attributable to common stockholders utilized in the basic and diluted earnings per share calculations.
Denominator:
The outstanding Series A preferred units are non-participating securities and thus are included in the computation of diluted earnings per share on an as-if-converted basis if they are dilutive. For the three months ended March 31, 2026 and 2025, these shares were not included in the diluted earnings per share calculation as they would have been anti-dilutive.
For the three months ended March 31, 2026 and 2025, diluted weighted average common shares do not include the impact of unvested compensation-related shares as they would have been anti-dilutive.
Outstanding Equity Awards and Units
The following equity awards and units were outstanding as of March 31, 2026 and December 31, 2025, respectively.
| March 31, |
| December 31, | |||
2026 | 2025 | |||||
Shares | | | ||||
Common Units | | | ||||
Unvested Restricted Stock Awards | | | ||||
| |
Note 10—Hedge Accounting
Cash Flow Hedging Strategy
The Company manages economic risks, including interest rate, liquidity, and credit risk, by managing the amount, sources, duration and interest rate exposure of its financing sources. The Company may also use interest rate derivative financial instruments, primarily interest rate swaps.
For derivative instruments that are designated and qualify as a cash flow hedge (i.e., hedging the exposure to variability in expected future cash flows that is attributable to a particular risk), the entire change in the fair value of the Company’s designated cash flow hedges is recorded to accumulated other comprehensive income, a component of stockholders’ equity in the Company’s consolidated balance sheets.
On March 26, 2020, the Company terminated its existing swap agreement and entered into a new interest rate swap agreement to obtain a more favorable interest rate and to manage interest rate risk exposure, which was effective April 1, 2020. An interest rate swap agreement utilized by the Company effectively modified the Company’s exposure to interest rate risk by converting the Company’s floating-rate debt to a fixed rate basis for the next
29
indebtedness under the Rabobank Mortgage Note, the Company amended its existing swap agreement to adjust the total notional amount from $
The Company determined the hedge effectiveness of its interest rate swaps at inception by applying a quantitative evaluation of effectiveness using regression analysis. On an ongoing basis the Company applies an initial qualitative assessment of on-going effectiveness and reviews hedge effectiveness through assessing the hedge relationship by comparing the current terms of the swap and the associated debt to ensure they continue to coincide through the continued ability of the Counterparty to the swap to honor its obligations under the swap contract. If the qualitative assessment indicates that the hedge relationship was not highly effective, the Company would then perform a quantitative evaluation using regression analysis. The Company concluded the hedge was highly effective at inception and remained highly effective through its expiration on March 1, 2026.
The effect of derivative instruments on the consolidated statements of operations for the periods ended March 31, 2026 and 2025 is set out below:
Cash flow hedging relationships | | Location of Gain (Loss) reclassified from Accumulated OCI into income |
Interest rate contracts | Interest expense |
The net change associated with current period hedging transactions was $
The fair values of the Company’s interest rate swap agreements are determined using the market standard methodology of netting the discounted future fixed cash payments and the discounted expected variable cash receipts, which is considered a Level 2 measurement under the fair value hierarchy. Level 2 is defined as inputs other than quoted prices in active markets that are either directly or indirectly observable. There were
The following table outlines the movements in the other comprehensive income account as of March 31, 2026 and December 31, 2025:
($ in thousands) | | March 31, 2026 | | December 31, 2025 | ||||
Beginning accumulated derivative instrument gain or loss | $ | | $ | | ||||
Net change associated with current period hedging transactions | ( | ( | ||||||
Amortization of frozen AOCI on de-designated hedge | ( | ( | ||||||
Difference between a change in fair value of excluded components | — | — | ||||||
Closing accumulated derivative instrument gain or loss | $ | — | $ | | ||||
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Note 11—Income Taxes
The TRS income/(loss) before provision for income taxes consisted of the following:
For the three months ended | ||||||
($ in thousands) | March 31, 2026 | March 31, 2025 | ||||
United States | $ | ( | $ | ( | ||
International | — | — | ||||
Total | $ | ( | $ | ( | ||
The federal and state income tax provision (benefit) is summarized as follows:
For the three months ended | ||||||
($ in thousands) | March 31, 2026 | March 31, 2025 | ||||
Current: | ||||||
Federal | $ | | $ | — | ||
State | — | — | ||||
Total Current Tax (Benefit) Expense | $ | | $ | — | ||
Deferred: | ||||||
Federal | ( | | ||||
State | — | — | ||||
Total Tax (Benefit) Expense | $ | | $ | | ||
Deferred income taxes reflect the net tax effects of (a) temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, and (b) operating losses and tax credit carryforwards. The tax effects of significant items comprising the TRS’s deferred taxes as of March 31, 2026 and December 31, 2025 are as follows:
($ in thousands) | March 31, 2026 | December 31, 2025 | ||||
Deferred tax assets: | ||||||
Net operating loss | $ | | $ | | ||
Charitable Contributions | | — | ||||
CECL Adjustment | | | ||||
Total deferred tax assets | $ | | | |||
Deferred tax liabilities: | ||||||
Fixed assets | $ | — | $ | ( | ||
Installment Sale | ( | ( | ||||
Total deferred tax liabilities | $ | ( | $ | ( | ||
Valuation Allowance | ( | ( | ||||
Net deferred taxes | $ | — | $ | ( | ||
ASC 740, Income Taxes, requires that the tax benefit of net operating losses, temporary differences and credit carryforwards be recorded as an asset to the extent that management assesses that realization is “more likely than not.” Realization of the future tax benefits is dependent on the TRS’s ability to generate sufficient taxable income within the carryforward period. Because of the TRS’s recent history of operating losses, and management’s inability to accurately project future taxable income, management believes that recognition of the deferred tax assets arising from the above-mentioned future tax benefits is currently not likely to be realized and, accordingly, has provided a valuation allowance. The valuation allowance decreased by $
The TRS concluded that it cannot make a reasonable estimate of the annual effective tax rate, and therefore, the TRS used the year-to-date effective tax rate in determining the amount of income tax expense to recognize.
Net operating losses and tax credit carryforwards as of March 31, 2026 are as follows:
($ in thousands) | March 31, 2026 | Expiration Year | ||||
Net operating losses, federal (Post-December 31, 2017) | $ | | Does not expire | |||
Net operating losses, state | $ | | Various | |||
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The effective tax rate of the TRS’s provision (benefit) for income taxes differs from the federal statutory rate as follows:
Tax (Benefit) Expense | |||||||
For the three months ended March 31, | |||||||
($ in thousands | 2026 | | 2025 | ||||
Statutory Rate | $ | ( | $ | ( | |||
State Tax | — | ( | |||||
Valuation Allowance | | | |||||
$ | | $ | | ||||
Tax Rate | |||||||
For the three months ended March 31, | |||||||
2026 | | 2025 | |||||
Statutory Rate | | % | | % | |||
State Tax | — | % | | % | |||
Valuation Allowance | ( | % | ( | % | |||
( | % | ( | % | ||||
Note 12—Subsequent Events
We have evaluated subsequent events and transactions for potential recognition or disclosure in the financial statements through the day the financial statements were issued.
Dividends
On
Repayments on Credit Facilities
Subsequent to March 31, 2026, the Company made repayments of $
Collection of Loan under the FPI Loan Program
On April 3, 2026, the Company received principal collections on a loan under the FPI Loan Program for $
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Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following analysis of our financial condition and results of operations should be read in conjunction with the consolidated financial statements and the notes included elsewhere in this Quarterly Report, as well as the information contained in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the Securities Exchange Commission (the “SEC”) on February 19, 2026, which is accessible on the SEC’s website at www.sec.gov. References to the “Company,” “we,” “our,” and “us” refer to Farmland Partners Inc. (“FPI”), a Maryland corporation, together with its consolidated subsidiaries, including Farmland Partners Operating Partnership, L.P., a Delaware limited partnership (the “Operating Partnership”), of which FPI is the sole member of the sole general partner.
Special Note Regarding Forward-Looking Statements
We make statements in this Quarterly Report on Form 10-Q that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (set forth in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). These forward-looking statements include, without limitation, statements concerning pending acquisitions and dispositions, projections, predictions, expectations, estimates or forecasts as to our business, financial and operational results, future stock repurchases and other transactions affecting our capitalization, our dividend policy, future economic performance, crop yields and prices and future rental rates for our properties, ongoing litigation, as well as statements of management’s goals and objectives and other similar expressions concerning matters that are not historical facts. When we use the words “may,” “should,” “could,” “would,” “predicts,” “potential,” “confident,” “continue,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates” or similar expressions or their negatives, as well as statements in future tense, we intend to identify forward-looking statements. Although we believe that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, beliefs and expectations, such forward-looking statements are not predictions of future events or guarantees of future performance, and our actual results could differ materially from those set forth in the forward-looking statements. Some factors that might cause such a difference include the following: the ongoing wars in Ukraine and Iran and other geopolitical tensions and their impact on our tenants’ businesses and the farm economy generally, changes in tariffs and trade policies in the United States and other countries that import U.S. agricultural products, including the impact of tariffs on the export of U.S. soybeans to China, high inflation and elevated interest rates, the onset of an economic recession in the United States and other countries that impact the farm economy, extreme weather events, such as droughts, tornadoes, hurricanes, wildfires or floods, the impact of future public health crises on our business and on the economy and capital markets generally, general volatility of the capital markets and the market price of our common stock, changes in our business strategy, availability, terms and deployment of capital, our ability to refinance existing indebtedness at or prior to maturity on favorable terms, or at all, availability of qualified personnel, changes in our industry or the general economy, the degree and nature of our competition, the outcomes of ongoing litigation, our ability to identify new acquisitions or dispositions and close on pending acquisitions or dispositions and the other factors described in the risk factors described in Item 1A, “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2025, and in other documents that we file from time to time with the SEC. Given these uncertainties, undue reliance should not be placed on such statements. We assume no obligation to update forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking statements, except to the extent required by law.
Overview and Background
Our primary strategic objective is to utilize our position as a leading institutional acquirer, owner and manager of high-quality farmland located in agricultural markets throughout North America to deliver strong risk adjusted returns to investors through a combination of cash dividends and asset appreciation. As of March 31, 2026, we owned farms with an aggregate of approximately 70,400 acres in Arkansas, California, Colorado, Illinois, Indiana, Louisiana, Missouri, Nebraska, South Carolina, Texas and West Virginia. In addition, as of March 31, 2026, we owned land and buildings for four agriculture equipment dealerships in Ohio leased to Ag Pro under the John Deere brand. As of March 31, 2026, approximately 60% of our portfolio (by value) was used to grow primary crops, such as corn, soybeans, wheat, rice and cotton, and approximately 40% was used to produce specialty crops, such as almonds, pistachios, citrus, avocados, strawberries, and edible beans. We believe our portfolio gives investors the economic benefit of increasing global food demand in the face of growing scarcity of high-quality farmland and will continue to reflect the approximate allocation of
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U.S. agricultural output between primary crops and animal protein (whose production relies principally on primary crops as feed), on one hand, and specialty crops, on the other.
In addition, under the FPI Loan Program, we make loans to landowners with whom we have established relationships and third-party farmers (both tenant and non-tenant) to provide financing for business operations, property acquisitions, working capital requirements, operational farming activities, farming infrastructure projects and non-farming business needs. Loans made under the FPI Loan Program are secured by both agricultural and non-agricultural collateral, the values of which the company monitors throughout the life of a loan. Non-agricultural collateral may carry a different risk profile, which can cause values to change over the course of a loan, and which may cause variability in our credit loss exposure.
FPI was incorporated in Maryland on September 27, 2013, and is the sole member of the sole general partner of the Operating Partnership, which is a Delaware limited partnership that was formed on September 27, 2013. All of FPI’s assets are held by, and its operations are primarily conducted through, the Operating Partnership and its wholly owned subsidiaries. As of March 31, 2026, FPI owned 99.1% of the Common units and none of the Series A preferred units. See “Note 9—Stockholders’ Equity and Non-controlling Interests” within the notes to the consolidated financial statements included in this Quarterly Report on Form 10-Q for additional information regarding the non-controlling interests.
FPI has elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended, commencing with its short taxable year ended December 31, 2014.
The following table sets forth our ownership of acreage by region as of March 31, 2026:
Region (1) | | Total Acres |
Corn Belt (2) | 36,577 | |
Delta and South | 6,459 | |
High Plains | 7,373 | |
Southeast | 10,177 | |
West Coast | 9,774 | |
70,360 |
| (1) | Corn Belt includes farms located in Illinois, Indiana, Missouri and eastern Nebraska. Delta and South includes farms located in Arkansas and Louisiana. High Plains includes farms located in Colorado and Texas. Southeast includes farms located in South Carolina and West Virginia. West Coast includes farms located in California. |
| (2) | In addition, we own land and buildings for four agriculture equipment dealerships in Ohio leased to Ag Pro under the John Deere brand. |
We intend to continue acquiring additional farmland that we believe provides opportunities for risk-adjusted investment returns consistent with our primary strategic objective. We also intend to continue to selectively dispose of assets when we believe we can redeploy the proceeds from such sales in a manner that enhances stockholder returns. We also may acquire, and make loans secured by mortgages on, properties related to farming, such as grain storage facilities, grain elevators, feedlots, processing plants and distribution centers, as well as livestock farms or ranches. In addition, we engage directly in farming, and provide volume purchasing services to our tenant, through FPI Agribusiness Inc., our taxable REIT subsidiary (the “TRS” or “FPI Agribusiness”). As of March 31, 2026, the TRS directly operated 1,845 acres of farmland located in California.
Our principal source of revenue is rent from tenants that conduct farming operations on our farmland. The majority of the leases that are in place as of the date of this Quarterly Report on Form 10-Q have fixed rent payments. Some of our leases have variable rents based on the revenue generated by our farm-operator tenants. We believe that this mix of fixed and variable rents will help insulate us from the variability of farming operations and reduce our credit-risk exposure to farm-operator tenants while making us an attractive landlord in certain regions where variable leases are customary. However, we may be exposed to tenant credit risk and farming operation risks, particularly with respect to leases that do not require advance payment of 100% of the fixed rent, variable rent arrangements and leases with terms greater than one year.
In addition, for leases that provide for variable rent payments, we may recognize revenue up to the amount of the crop insurance minimum. The excess above crop insurance minimums cannot be recognized as revenue until the tenant enters
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into a contract to sell their crop. Generally, we expect tenants to enter into contracts to sell their crop following the harvest of the crop.
Factors That May Influence Future Results of Operations and Farmland Values
The principal factors affecting our operating results and the value of our farmland include long-term global demand for food relative to the global supply of food; farmland fundamentals and economic conditions in the markets in which we own farmland; and our ability to increase or maintain rental revenues while controlling expenses. We are currently in an environment of appreciating land values, driven by, among other things, inflation, strong commodity prices and an outlook for high levels of farmer profitability. Sustained high interest rates can serve as a counter-balancing external factor to this favorable environment. Each year additional farmland in various portions of the world, including the United States, is repurposed for commercial development, thus decreasing the land acreage available for production of grains, oil seeds, permanent and specialty crops necessary to feed the world’s growing population. Although farmland prices may show a decline from time to time, we believe that any reduction in U.S. farmland values overall is likely to be short-lived as global demand for food and agricultural commodities typically exceeds global supply and quality farmland becomes scarcer.
Food Demand
We expect that global demand for food, driven primarily by significant increases in the gross domestic product (“GDP”) per capita and global population, will continue to be the key driver of farmland values. We expect that global demand for most crops will continue to keep pace with global population growth. We also believe that growth in global GDP per capita, particularly in developing nations, will contribute significantly to increasing demand for primary crops. As global GDP per capita increases, the composition of daily caloric intake is expected to shift away from the direct consumption of primary crops toward more fruits, vegetables and animal-based proteins, which is expected to result in increased demand for primary crops as feed for livestock. We believe that once individuals increase consumption of higher quality food, they will strongly resist returning to their former dietary habits, resulting in greater inelasticity in the demand for food. We anticipate these factors will lead to either higher crop prices and/or higher yields and, therefore, higher rental rates on our farmland, as well as sustained growth in farmland values over the long term.
In addition, global demand for corn and soybeans as inputs in the production of biofuels such as ethanol and soy-based diesel also could impact the prices of corn and soybeans, which, in the long term, could impact our rental revenues and our results of operations. However, we believe that growth in GDP per capita and global population will be more significant drivers of global demand for primary crops over the long term.
Despite advances in income, according to “The State of Food Security and Nutrition in the World 2025,” a report by the United Nations Food and Agriculture Organization, 2.3 billion people were facing moderate to severe food insecurity in 2024. In particular, the disruption in farming operations in Ukraine as a result of the ongoing war in Ukraine has stressed the food supply for many countries that depend on imports of agricultural products from the region, such as Egypt (wheat for food products) and China (corn for livestock). The Russian Federation is also a major exporter of fertilizers and trade restrictions have hampered the flow of fertilizers to countries dependent on imports from the Black Sea region. The conflict in Iran and the blockade of the Strait of Hormuz have also caused a major disruption in fertilizer exports from the region, as well as a significant increase in fuel prices. United States farmers, including our tenants, however, generally source the majority of fertilizers from the United States and Canada.
Farmland Supply
According to the World Bank Group, arable land per capita has decreased by approximately 50% from 1961 to 2023, the decrease of which has been exacerbated by international conflicts in major agricultural regions, such as the ongoing war in Ukraine and other geopolitical tensions. Typically, additions to cropland are in areas of marginal productivity, while cropland loss, driven by urban development, tends to affect primarily highly productive areas. According to a study published in 2017 in the Proceedings of the National Academy of Sciences, urban expansion is expected to take place on cropland that is 1.77 times more productive than the global average. The global supply of food is also impacted by the productivity per acre of arable land. Historically, productivity gains (measured by average crop yields) have been driven by advances in seed technology, farm equipment, irrigation techniques, and improvements in soil health, chemical nutrients
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and pest control. On the other hand, we expect the shortage of water in many irrigated growing regions in the United States and around the globe, often as a result of new water restrictions imposed by laws or regulations, to lead to decreased productivity on those acres.
Conditions in Our Existing Markets
Our portfolio is broadly diversified across numerous farmland markets and crop types. Across all regions, farmland acquisitions continue to be dominated by buyers who are existing farm owners and operators, whereas institutional investors constitute a small fraction of the industry (less than 5% of total farmland in the United States). We generally see firm demand for high quality properties across all regions and crop types.
Farmland values are typically very stable, often showing modest increases even in years of commodity price weakness. We expect this trend to continue, with modest but consistent annual increases that compound into significant appreciation in the long term. Under certain market conditions, as in 2021, 2022 and 2023, with strong commodity prices and farmer profitability, there are periods of accelerating appreciation in farmland values. Leases renegotiated under the robust market conditions experienced in 2021, 2022, and 2023 reflected significant rent increases. While the pace of appreciation and transaction volume slowed in 2023 and 2024, these metrics remain strong relative to long-term trends.
We believe quality farmland in the United States has a near-zero vacancy rate as a result of the supply and demand fundamentals discussed above. We believe that due to the relatively high fixed costs associated with farming operations (including equipment, labor and knowledge), many farm operators choose to rent additional acres of farmland when it becomes available in order to allocate their fixed costs over additional acres. Our view is that rental rates for farmland are a function of farmland operators’ view of the long-term profitability of farmland, and that many farm operators will compete for farmland even during periods of decreased profitability due to the scarcity of farmland available to rent. Furthermore, because it is generally customary in the industry to provide the existing tenant with the opportunity to re-lease the land at the end of each lease term, we believe that many farm operators will rent additional land that becomes available in order to control the ability to farm that land in future periods. As a result, in our experience, many farm operators will aggressively pursue rental opportunities in their operable geographic area, even when the farmer anticipates lower profits returns or even short-term losses.
Lease Expirations
Farm leases are generally one to three years in duration. As of March 31, 2026, our portfolio had the following lease expirations as a percentage of approximate acres leased and annual minimum fixed rents:
($ in thousands) |
| |||||||||||||
Year Ending December 31, | | Approximate Acres | | % of Approximate | | Annual Fixed | | % of Annual |
| |||||
2026 (remaining nine months) |
| 19,816 | 28.2 | % | $ | 6,979 |
| 34.8 | % | |||||
2027 | 22,071 | 31.4 | % | 7,587 |
| 37.9 | % | |||||||
2028 |
| 7,915 | 11.2 | % | 1,658 |
| 8.3 | % | ||||||
2029 |
| 6,728 | 9.6 | % | 239 |
| 1.2 | % | ||||||
2030 | — | — | % | — | — | % | ||||||||
Thereafter | 13,830 | 19.6 | % | 3,578 | 17.8 | % | ||||||||
| 70,360 | 100.0 | % | $ | 20,041 | 100.0 | % | |||||||
Rental Revenues
Our revenues are primarily generated from renting farmland to operators of farming businesses. Our leases generally have terms ranging from one to three years, with some extending up to 40 years (e.g., renewable energy leases). Although the majority of our leases do not provide the tenant with a contractual right to renew the lease upon its expiration, we believe it is customary to provide the existing tenant with the opportunity to renew the lease, subject to any increase in the rental rate that we may establish. If the tenant elects not to renew the lease at the end of the lease term, the land will be offered to a new tenant. As discussed above, the vacancy rate for quality U.S. farmland is near-zero and there is often competition among prospective tenants for quality farmland; accordingly, we do not believe that re-leasing farmland upon the expiration of existing leases is a significant risk for the Company.
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The leases for the majority of the row-crop properties in our portfolio provide that tenants pay us, typically, 50% of their fixed farm rent in advance of each spring planting season. As a result, we collect a significant portion of total annual rents in the first calendar quarter of each year, which we believe mitigates the tenant credit risk associated with the variability of farming operations that could be adversely impacted by poor crop yields, weather conditions, mismanagement, undercapitalization or other factors affecting our tenants. Tenant credit risk is further mitigated by the farming industry practice of purchasing crop insurance in almost every circumstance because it is required by lenders who provide working capital financing to our tenants and due to requirements in our leases. In certain cases, the Company perfects its security interest in the crop insurance proceeds and the underlying growing crops using practices applicable in the state where the farm is located. Prior to acquiring farmland property, we take into consideration the competitiveness of the local farm-operator tenant environment in order to enhance our ability to quickly replace a tenant that is unwilling to renew a lease or is unable to pay a rent payment when it is due. Many of our leases provide for the reimbursement by the tenant of the property’s real estate taxes that we pay in connection with the farms they rent from us.
Expenses
Substantially all of our farm leases are structured in such a way that we are responsible for major maintenance expenses, certain liability and casualty insurance and taxes (which are sometimes reimbursed to us by our tenants), while our tenant is responsible for operating expenses, minor maintenance, water usage and all of the additional input costs related to farming operations on the property, such as seed, fertilizer, labor and fuel. We expect leases for farmland we acquire in the future will contain similar features related to expenses. As the owner of the land, we generally only bear costs related to major capital improvements permanently attached to the property, such as irrigation systems, drainage tile, grain storage facilities, permanent plantings or other physical structures customary for farms. In cases where capital expenditures are necessary, we typically seek to offset, over a period of multiple years, the costs of such capital expenditures by increasing rental rates.
We incur costs associated with running a public company, including, among others, costs associated with our personnel, Board of Directors, regulatory compliance, legal and accounting, due diligence and acquisitions (including, among others, travel expenses and consulting fees). Inflation in personnel costs, which is impacting many United States businesses, has not significantly impacted our expenses to date.
We also incur costs associated with managing farmland assets. The management of our farmland, generally, has significant economies of scale, as farmland generally has minimal physical structures that require routine inspection and maintenance, and our leases, generally, are structured to require the tenant to pay many of the operating expenses associated with the property. We do not expect the expenses associated with managing our portfolio of farmland to increase significantly as the number of farm properties we own increases over time.
Crop Prices
We believe that long-term farmer profitability and revenue per acre, expressed as crop prices multiplied by crop yield, is a much more significant driver of farm value than short-term crop prices. Crop yield trends in corn and soybeans have been steadily increasing over the last thirty years. For instance, after yields for the 2024/2025 marketing year (September 2024 to August 2025) increased slightly for corn and held steady for soybeans compared to the previous year, the USDA projected that yields will increase slightly for the 2025/2026 marketing year (September 2025 to August 2026). Short-term crop price changes have had little effect historically on farmland values. They also have a limited impact on our rental revenue, as most of our leases provide for fixed farm rents, a common approach in agricultural markets, especially with respect to row crops. Fixed farm rent significantly simplifies the administrative requirements for the landlord and the tenant, as farmers benefit from the fundamental revenue hedging that occurs when large crop yields mitigate the effect of lower crop prices. Similarly, lower crop yields have a tendency to trigger higher crop prices and help increase revenue even when confronted by lower crop yields. Such hedging effect also limits the impact of short-term crop price changes on revenues generated by leases with a variable rent component based on farm revenues. Further risk mitigation is available to tenants, and indirectly to us, via crop insurance and hedging programs implemented by tenants. Our TRS also takes advantage of these risk mitigation programs and strategies with respect to the properties it directly operates.
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Crop prices are affected by many factors that can differ on a yearly basis. Weather conditions and crop diseases can create a significant risk of price volatility. Changes in government regulations and policy, fluctuations in global prosperity, fluctuations in foreign trade and export markets and eruptions of military conflicts, such as the wars in Ukraine and Iran and other geopolitical tensions, or civil unrest also impact crop prices.
Inflation and Interest Rates
Most of our farming leases have lease terms of three years for row crops and up to seven years for permanent crops, pursuant to which each tenant is responsible for substantially all of the operating expenses related to the property, including maintenance, water usage and insurance. As a result, we believe that the effect on us of inflationary increases in operating expenses are borne largely by our tenants under the terms of their leases, and increases in farmer profitability generally lead to increased rents upon lease renewals, as we experienced in the 2023 renewal cycle.
High levels of inflation prompted the Board of Governors of the United States Federal Reserve (the “Federal Reserve”) to increase the federal funds rate eleven times between March 2022 and July 2023, which led to a significant increase in market short- and long-term interest rates beginning in early 2022. This increase in rates significantly increased the cost of our floating rate debt and also significantly increased the cost of certain of our MetLife debt with interest rates that have been reset since the beginning of 2022. The Federal Reserve lowered the federal funds rate in September, November and December 2024 and in September, October and December 2025. We anticipate future rate cuts, if any, will have a favorable impact on the cost of debt for the Company moving forward. However, interest rates remain high relative to the recent past, and the Federal Reserve’s plans are subject to numerous uncertainties.
As of March 31, 2026, $134.9 million of our outstanding indebtedness was subject to interest rates that reset before maturity (excluding our floating rate debt). As of January 1, 2026, $26.2 million was subject to interest rates that reset in 2026. The weighted average interest rate of the indebtedness subject to interest rate resets in 2026 was 5.64%. As of March 31, 2026, $19.3 million had been reset at a weighted average interest rate of 5.19%.
At March 31, 2026, $76.1 million, or 32.7%, of our debt had variable interest rates. The Company had an interest rate swap agreement with Rabobank for $4.9 million. The agreement expired on March 1, 2026 (see “Note 10—Hedge Accounting”).
We expect that future changes in interest rates will impact our overall operating performance by, among other things, affecting our borrowing costs and the borrowing costs of our tenants. While we may seek to manage our exposure to future changes in rates through interest rate swap agreements or interest rate caps, portions of our overall outstanding debt will likely remain at floating rates or subject to interest rates that reset periodically. In addition, if interest rates begin to rise again, farmland prices may decline if the rise in real interest rates (nominal interest rates minus the inflation rate) is not accompanied by rises in the general levels of inflation. However, our business model anticipates that over time the value of our farmland will increase, as it has in the past, at a rate that is equal to or greater than the rate of inflation, which may in part offset the impact of rising interest rates on the value of our farmland, but there can be no guarantee that this appreciation will occur to the extent that we anticipate or at all.
International Trade
According to the USDA, approximately 10-20% of domestic corn production and 40-60% of domestic soybean production is exported. According to the USDA Outlook for Agricultural Trade, the top three export countries from the United States were China, Mexico, and Canada. Exports to China for fiscal year 2025 (October 2024 to September 2025) were $16.2 billion, down 37% from 2024. Exports to Canada were $28.2 billion, down 3% from 2024. Exports to Mexico were $30.4 billion, up 1% from 2024. The recent imposition by the United States of tariffs on imported goods from these trading partners may strain international trade relations and increase the risk that foreign governments will implement retaliatory tariffs on agricultural and other goods imported from the United States.
While the ongoing uncertainty around terms of international trade, including the impact of tariffs on the export of U.S. soybeans to China and the wars in Ukraine and Iran and other geopolitical tensions, has introduced uncertainty around crop pricing and therefore farmer profitability, we believe that the significant role of U.S. crop production vis-a-vis global
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food demand will generally lead to only temporary dislocations in crop supply chains for the major commodity crops, and therefore farmland values will not be significantly impacted.
Critical Accounting Policies and Estimates
The preparation of financial statements in conformity with GAAP requires that management make estimates and assumptions that affect the reported amount of assets and liabilities and the disclosure of contingent assets and liabilities at the date of our financial statements and the reported amounts of revenues and expenses during the reporting period. Except as set forth in Note 1 to the consolidated financial statements included in this Quarterly Report on Form 10-Q, there have been no changes to our critical accounting policies disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025.
New or Revised Accounting Standards
For a summary of the new or revised accounting standards, please refer to “Note 1—Organization and Significant Accounting Policies” within the notes to the consolidated financial statements included in this Quarterly Report on Form 10-Q.
Results of Operations
Comparison of the three months ended March 31, 2026 to the three months ended March 31, 2025
For the three months ended March 31, |
| |||||||||||
($ in thousands) | | 2026 | | 2025 | | $ Change | | % Change | ||||
OPERATING REVENUES: | ||||||||||||
Rental income | $ | 6,297 | $ | 6,970 | $ | (673) |
| (9.7) | % | |||
Crop sales | 264 | 847 | (583) | (68.8) | % | |||||||
Other revenue |
| 3,541 |
| 2,435 |
| 1,106 |
| 45.4 | % | |||
Total operating revenues |
| 10,102 |
| 10,252 |
| (150) |
| (1.5) | % | |||
OPERATING EXPENSES | ||||||||||||
Depreciation, depletion and amortization |
| 910 |
| 1,173 |
| (263) |
| (22.4) | % | |||
Property operating expenses |
| 1,216 |
| 1,480 |
| (264) |
| (17.8) | % | |||
Cost of goods sold | 282 | 664 | (382) | (57.5) | % | |||||||
Provision for credit loss allowance | 1,819 | 69 | 1,750 | NM | ||||||||
Acquisition and due diligence costs |
| — |
| 5 |
| (5) |
| NM | ||||
General and administrative expenses |
| 1,926 |
| 2,552 |
| (626) |
| (24.5) | % | |||
Legal and accounting |
| 367 |
| 444 |
| (77) |
| (17.3) | % | |||
Other operating expenses | — | 12 | (12) | NM | ||||||||
Total operating expenses |
| 6,520 |
| 6,399 |
| 121 |
| 1.9 | % | |||
OTHER (INCOME) EXPENSE: | ||||||||||||
Other (income) | (26) | (133) | 107 | (80.5) | % | |||||||
(Income) loss from equity method investment | (21) | 1 | (22) | NM | ||||||||
(Gain) loss on disposition of assets, net | 255 | (763) | 1,018 | NM | ||||||||
Interest expense |
| 2,721 |
| 2,638 |
| 83 |
| 3.1 | % | |||
Total other expense |
| 2,929 |
| 1,743 |
| 1,186 |
| 68.0 | % | |||
Net income before income tax expense | 653 | 2,110 | (1,457) | (69.1) | % | |||||||
Income tax expense | 7 | 17 | (10) | (58.8) | % | |||||||
NET INCOME | $ | 646 | $ | 2,093 | $ | (1,447) |
| (69.1) | % | |||
NM=Not Meaningful
Our net income for the three months ended March 31, 2026 was primarily affected by dispositions that occurred in 2025 and 2026, as well as lower proceeds from a solar lease arrangement with a tenant and crop sales and a higher provision for credit loss allowance, partially offset by higher interest income and lower cost of goods sold and general and administrative expenses.
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Rental income decreased $0.7 million, or 9.7%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025, resulting primarily from dispositions that occurred in 2025 and 2026 and lower proceeds from a solar lease arrangement with a tenant compared to the three months ended March 31, 2025, as the prior-year period included certain non-recurring amounts.
Crop sales decreased $0.6 million, or 68.8%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. This decrease was primarily as a result of the disposition of a walnut property under direct operations in the fourth quarter of 2025.
Other revenue increased $1.1 million, or 45.4%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. This increase was due to additional interest income as a result of a higher average balance on loans under the FPI Loan Program and financing receivables as well as amortization of points and increased oil and gas royalties. These increases were partially offset by lower auction, brokerage and third-party management income due to the sale of MWA in the fourth quarter of 2025.
Depreciation, depletion and amortization decreased $0.3 million, or 22.4%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. This decrease was a result of asset dispositions in 2025 and 2026 and a lower cost basis on assets impaired during the year ended December 31, 2025.
Property operating expenses decreased $0.3 million, or 17.8%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025, resulting primarily from lower tax, repairs and maintenance, insurance and travel expenses primarily due to dispositions that occurred in 2025 and 2026.
Cost of goods sold decreased $0.4 million, or 57.5%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. This decrease was primarily as a result of the disposition of a walnut property under direct operations in the fourth quarter of 2025.
Provision for credit loss allowance increased $1.8 million for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. This increase was primarily the result of updated assumptions on the allowance for credit losses on loans under the FPI Loan Program and financing receivables.
Acquisition and due diligence costs were negligible during the three months ended March 31, 2026 and remained relatively consistent compared to the three months ended March 31, 2025.
General and administrative expenses decreased $0.6 million, or 24.5%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025, resulting primarily from lower compensation and travel expense due to the sale of MWA in November 2025.
Legal and accounting expenses remained relatively flat at $0.4 million for the three months ended March 31, 2026 and 2025.
Other operating expenses were negligible during the three months ended March 31, 2026 and remained relatively consistent compared to the three months ended March 31, 2025.
Other income remained relatively flat at less than $0.1 million and $0.1 million for the three months ended March 31, 2026 and 2025, respectively.
(Income) loss from equity method investment was negligible during the three months ended March 31, 2026 and remained relatively consistent compared to the three months ended March 31, 2025.
(Gain) loss on disposition of assets, net decreased $1.0 million for the three months ended March 31, 2026 compared to the three months ended March 31, 2025, primarily due to the farmland value on properties sold relative to book value during the three months ended March 31, 2026 as compared to the three months ended March 31, 2025. During the three
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months ended March 31, 2026, we completed the disposition of one property in the West Coast region for approximately $9.4 million in consideration and recognized a loss on sale of $0.3 million. We completed the dispositions of two properties in the Delta and South and West Coast regions during the three months ended March 31, 2025 for approximately $10.0 million in aggregate consideration, including $2.1 million in seller financing, and recognized an aggregate gain on sale of $0.8 million.
Interest expense remained relatively flat at $2.7 million and $2.6 million for the three months ended March 31, 2026 and 2025, respectively.
Income tax expense was negligible during the three months ended March 31, 2026 and remained relatively consistent compared to the three months ended March 31, 2025.
Liquidity and Capital Resources
Overview
Liquidity is a measure of our ability to meet potential cash requirements, including ongoing commitments to repay any outstanding borrowings, fund and maintain our assets and operations, acquire new properties, make distributions to our stockholders and unitholders, and fund other general business needs.
Despite cuts in the federal funds rate by the Federal Reserve in September, November and December 2024 and in September, October and December 2025, interest rates remain high relative to the recent past. We expect to meet our liquidity needs through cash on hand, undrawn availability under our lines of credit ($114.4 million in availability as of March 31, 2026), operating cash flows, borrowings, proceeds from equity issuances and selective asset dispositions where such dispositions are deemed to be in the best interests of the Company. The Company also has an effective shelf-registration statement that it may use to issue equity or debt securities to raise capital from time to time.
Our ability to incur additional debt will depend on a number of factors, including our degree of leverage, the value of our unencumbered assets, compliance with the covenants under our existing debt agreements, borrowing restrictions that may be imposed by lenders and the conditions of debt markets.
When material debt repayments are due within the following 12 months, we work with current and new lenders and other potential sources of capital sufficiently in advance of the debt maturity to ensure that all of our obligations are satisfied in a timely manner. We have a history of being able to refinance or extend our debt obligations to manage our debt maturities. Our ability to access the equity capital markets will depend on a number of factors as well, including general market conditions. As of March 31, 2026, we had $19.3 million in debt maturities due within the next 12 months.
During the three months ended March 31, 2026, we repurchased no shares of our common stock under our share repurchase program. As of March 31, 2026, we had authority to repurchase up to an aggregate of $17.9 million in additional shares of our common stock.
Consolidated Indebtedness
For further details relating to our consolidated indebtedness as of March 31, 2026, refer to “Note 7—Mortgage Notes, Line of Credit and Bonds Payable” included in the financial statement section of this Quarterly Report on Form 10-Q.
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Sources and Uses of Cash and Cash Equivalents
The following table summarizes our cash flows for the three months ended March 31, 2026 and 2025:
For the three months ended March 31, | ||||||
(in thousands) | | 2026 | | 2025 | ||
Net cash and cash equivalents provided by operating activities | $ | 8,248 | $ | 6,370 | ||
Net cash and cash equivalents provided by investing activities | $ | 12,018 | $ | 99 | ||
Net cash and cash equivalents (used in) financing activities | $ | (11,818) | $ | (63,260) | ||
Comparison of the three months ended March 31, 2026 to the three months ended March 31, 2025
As of March 31, 2026, we had $17.7 million of cash and cash equivalents compared to $21.7 million at March 31, 2025.
Cash Flows from Operating Activities
Net cash and cash equivalents provided by operating activities increased by $1.9 million primarily as a result of the following:
| ● | Receipt of $12.0 million in fixed rent and $0.4 million in tenant reimbursements for the three months ended March 31, 2026 as compared to the receipt of $14.0 million in fixed rent and $0.4 million in tenant reimbursements for the three months ended March 31, 2025; |
| ● | (Gain) loss on disposition of assets, net of $0.3 million for the three months ended March 31, 2026 compared to $(0.8) million for the three months ended March 31, 2025; |
| ● | A change in accounts receivable of $2.1 million for the three months ended March 31, 2026 compared to $0.7 million for the three months ended March 31, 2025; |
| ● | A change in interest receivable of $(0.8) million for the three months ended March 31, 2026 compared to less than $(0.1) million for the three months ended March 31, 2025; |
| ● | A change in accrued interest of less than $0.1 million for the three months ended March 31, 2026 compared to $(0.6) million for the three months ended March 31, 2025; |
| ● | A change in accrued expenses of $(0.6) million for the three months ended March 31, 2026 compared to $(3.0) million for the three months ended March 31, 2025; and |
| ● | A change in deferred revenue of $4.1 million for the three months ended March 31, 2026 compared to $6.2 million for the three months ended March 31, 2025. |
Cash Flows from Investing Activities
Net cash and cash equivalents provided by investing activities increased by $11.9 million primarily as a result of the following:
| ● | No property acquisitions during the three months ended March 31, 2026 as compared to $6.5 million during the three months ended March 31, 2025; |
| ● | Proceeds from disposition of assets during the three months ended March 31, 2026 of $9.4 million as compared to $10.0 million during the three months ended March 31, 2025; |
| ● | Collections on notes receivable under the FPI Loan Program of $4.9 million during the three months ended March 31, 2026 as compared to $4.3 million during the three months ended March 31, 2025; and |
| ● | Issuances of notes receivable under the FPI Loan Program and financing receivables of $2.5 million during the three months ended March 31, 2026 as compared to $7.6 million during the three months ended March 31, 2025. |
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Cash Flows from Financing Activities
Net cash and cash equivalents (used in) financing activities decreased by $51.4 million primarily as a result of the following:
| ● | Borrowings from mortgage notes payable during the three months ended March 31, 2026 of $80.2 million as compared to no borrowings during the three months ended March 31, 2025; |
| ● | Repayments on mortgage notes payable during the three months ended March 31, 2026 of $9.0 million as compared to $2.0 million during the three months ended March 31, 2025; |
| ● | No common stock repurchases during the three months ended March 31, 2026 as compared to $0.7 million during the three months ended March 31, 2025; |
| ● | Redemption of Series A preferred units during the three months ended March 31, 2026 of $68.2 million as compared to no redemptions during the three months ended March 31, 2025; |
| ● | Dividends on common stock during the three months ended March 31, 2026 of $11.2 million as compared to $55.7 million during the three months ended March 31, 2025; and |
| ● | Distributions to non-controlling interests in operating partnership, common during the three months ended March 31, 2026 of $0.2 million as compared to $1.5 million during the three months ended March 31, 2025. |
Non-GAAP Financial Measures
Funds from Operations (“FFO”) and Adjusted Funds from Operations (“AFFO”)
We calculate FFO in accordance with the standards established by the National Association of Real Estate Investment Trusts, or Nareit. Nareit defines FFO as net income (loss) (calculated in accordance with GAAP), excluding gains (or losses) from sales of depreciable operating property, real estate related depreciation, depletion and amortization (excluding amortization of deferred financing costs), impairment write-downs of depreciated property, and adjustments associated with impairment write-downs for unconsolidated partnerships and joint ventures. FFO is a supplemental non-GAAP financial measure. Management presents FFO as a supplemental performance measure because it believes that FFO is beneficial to investors as a starting point in measuring our operational performance. Specifically, in excluding real estate related depreciation and amortization and gains and losses from sales of depreciable operating properties, which do not relate to or are not indicative of operating performance, FFO provides a performance measure that, when compared year over year, captures trends in occupancy rates, rental rates and operating costs. We believe that, as a widely recognized measure of the performance of REITs, FFO will be used by investors as a basis to compare our operating performance with that of other REITs.
However, because FFO excludes depreciation and amortization and captures neither the changes in the value of our properties that result from use or market conditions nor the level of capital expenditures necessary to maintain the operating performance of improvements on our properties, all of which have real economic effects and could materially impact our results from operations, the utility of FFO as a measure of our performance is limited. In addition, other equity REITs may not calculate FFO in accordance with the Nareit definition as we do, and, accordingly, our FFO may not be comparable to such other REITs’ FFO. Accordingly, FFO should be considered only as a supplement to net income as a measure of our performance. FFO should not be used as a measure of our liquidity, nor is it indicative of funds available to fund our cash needs, including our ability to pay dividends or service indebtedness. FFO also should not be used as a supplement to or substitute for cash flow from operating activities computed in accordance with GAAP.
We do not, however, believe that FFO is the only measure of our operating performance. Changes in GAAP accounting and reporting rules that were put in effect after the establishment of Nareit’s definition of FFO in 1999 result in the inclusion of a number of items in FFO that do not correlate with the sustainability of our operating performance. Therefore, in addition to FFO, we present AFFO and AFFO per share, fully diluted, both of which are non-GAAP measures. Management considers AFFO a useful supplemental performance metric for investors as it is more indicative of the Company’s operational performance than FFO. AFFO is not intended to represent cash flow or liquidity for the period and is only intended to provide an additional measure of our operating performance. Even AFFO, however, does not properly capture the timing of cash receipts, especially in connection with full-year rent payments under lease agreements entered into in connection with newly acquired farms. Management considers AFFO per share, fully diluted
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to be a supplemental metric to GAAP earnings per share. AFFO per share, fully diluted provides additional insight into how our operating performance could be allocated to potential shares outstanding at a specific point in time. Management believes that AFFO is a widely recognized measure of the operations of REITs, and presenting AFFO will enable investors to assess our performance in comparison to other REITs. However, other REITs may use different methodologies for calculating AFFO and AFFO per share, fully diluted, and, accordingly, our AFFO and AFFO per share, fully diluted may not always be comparable to AFFO and AFFO per share amounts calculated by other REITs. AFFO and AFFO per share, fully diluted should not be considered as an alternative to net income (loss) or earnings per share (determined in accordance with GAAP) as an indication of financial performance or as a measure of our liquidity, nor are they indicative of funds available to fund our cash needs, including our ability to make distributions.
AFFO is calculated by adjusting FFO to exclude or include the income and expenses that we believe are not reflective of the sustainability of our ongoing operating performance, as further explained below:
| ● | Real estate related acquisition and due diligence costs. Acquisition (including audit fees associated with these acquisitions) and due diligence costs are incurred for investment purposes and, therefore, do not correlate with the ongoing operations of our portfolio. The Company incurred an immaterial amount of acquisition and due diligence costs during the three months ended March 31, 2026 and 2025. We believe that excluding these costs from AFFO provides useful supplemental information reflective of the realized economic impact of our current acquisition strategy, which is useful in assessing the sustainability of our operating performance. These exclusions also improve the comparability of our results over each reporting period and of the Company with other real estate operators. |
| ● | Stock-based compensation. Stock-based compensation is a non-cash expense and, therefore, does not correlate with the ongoing operations of our portfolio. We believe that excluding these costs from AFFO improves the comparability of our results over each reporting period and of the Company with other real estate operators. |
| ● | Deferred impact of interest rate swap terminations. When an interest rate swap is terminated and the related termination fees are rolled into a new swap, the terminated swap's termination fees are amortized over what would have been the remaining life of the terminated swap, while the related contractual and financial obligations extend over the life of the new swap. We believe that, with this adjustment, AFFO better reflects the actual cash cost of the fixed interest rate we are obligated to pay under the new swap agreement, and results in improved comparability of our results across reporting periods. |
| ● | Distributions on Series A preferred units. Dividends on Series A preferred units, which were convertible into Common units on or after February 10, 2026, have a fixed and certain impact on our cash flow, and therefore are excluded from AFFO. We believe this improves the comparability of the Company with other real estate operators. |
| ● | Common shares fully diluted. In accordance with GAAP, common shares used to calculate earnings per share are presented on a weighted average basis. Common shares on a fully diluted basis includes shares of common stock, Common units, and unvested shares of restricted stock outstanding at the end of the period on a share equivalent basis, because all shares are participating securities and thus share in the performance of the Company. The conversion of Series A preferred units is excluded from the calculation of common shares fully diluted as they are not participating securities, and therefore do not share in the performance of the Company and their impact on shares outstanding is uncertain. |
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The following table sets forth a reconciliation of net income (loss) to FFO, AFFO and net income (loss) available to common stockholders per share to AFFO per share, fully diluted, the most directly comparable GAAP equivalents, respectively, for the periods indicated below (unaudited):
For the three months ended March 31, | ||||||
(in thousands except per share amounts) | | 2026 | | 2025 | ||
Net income | $ | 646 | $ | 2,093 | ||
(Gain) loss on disposition of assets, net | 255 | (763) | ||||
Depreciation, depletion and amortization |
| 910 | 1,173 | |||
FFO (1) | $ | 1,811 | $ | 2,503 | ||
Stock-based compensation |
| 468 | 519 | |||
Real estate related acquisition and due diligence costs | — | 5 | ||||
Distributions on Series A Preferred Units | (204) | (743) | ||||
AFFO (1) | $ | 2,075 | $ | 2,284 | ||
AFFO per diluted weighted average share data: | ||||||
AFFO weighted average common shares |
| 43,935 |
| 47,192 | ||
Net income available to common stockholders of Farmland Partners Inc. | $ | 0.01 | $ | 0.03 | ||
Income available to redeemable non-controlling interest and non-controlling interest in operating partnership | 0.00 |
|
| 0.03 | ||
Depreciation, depletion and amortization |
| 0.02 |
| 0.02 | ||
Stock-based compensation |
| 0.01 |
| 0.01 | ||
(Gain) loss on disposition of assets, net | 0.01 | (0.02) | ||||
Distributions on Series A Preferred Units |
| 0.00 | (0.02) | |||
AFFO per diluted weighted average share (1) | $ | 0.05 | $ | 0.05 | ||
| (1) | The three months ended March 31, 2025 and 2026 included approximately $1.0 million and $0.5 million, respectively, of income as a result of a solar lease arrangement with a tenant. |
The following table sets forth a reconciliation of AFFO share information to basic weighted average common shares outstanding, the most directly comparable GAAP equivalent, for the periods indicated below (unaudited):
| For the three months ended March 31, | |||||
(in thousands) | | 2026 | | 2025 | ||
Basic weighted average shares outstanding |
| 43,197 |
|
| 45,590 | |
Weighted average OP units on an as-if-converted basis |
| 399 |
|
| 1,203 | |
Weighted average time-based unvested restricted stock |
| 249 |
|
| 332 | |
Weighted average performance-based unvested restricted stock | 90 |
|
| 67 | ||
AFFO weighted average common shares |
| 43,935 |
|
| 47,192 | |
EBITDAre
The Company calculates Earnings Before Interest Taxes Depreciation and Amortization for real estate (“EBITDAre”) in accordance with the standards established by Nareit in its September 2017 White Paper. Nareit defines EBITDAre as net income (calculated in accordance with GAAP) excluding interest expense, income tax, depreciation and amortization, gains or losses on disposition of depreciated property (including gains or losses on change of control), impairment write-downs of depreciated property and of investments in unconsolidated affiliates caused by a decrease in value of depreciated property in the affiliate, and adjustments to reflect the entity’s pro rata share of EBITDAre of unconsolidated affiliates. EBITDAre is a key financial measure used to evaluate the Company’s operating performance but should not be construed as an alternative to operating income, cash flows from operating activities or net income, in each case as determined in accordance with GAAP. The Company believes that EBITDAre is a useful performance measure commonly reported and will be widely used by analysts and investors in the Company’s industry. However, while EBITDAre is a performance measure widely used across the Company’s industry, the Company does not believe that it correctly captures the Company’s business operating performance because it includes non-cash expenses and recurring adjustments that are
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necessary to better understand the Company’s business operating performance. Therefore, in addition to EBITDAre, management uses Adjusted EBITDAre, a non-GAAP measure.
We further adjust EBITDAre for certain additional items such as stock-based compensation, indirect offering costs and real estate acquisition related audit fees and real estate related acquisition and due diligence costs (for a full discussion of these adjustments, see AFFO adjustments discussed above) that we consider necessary to understand our operating performance. We believe that Adjusted EBITDAre provides useful supplemental information to investors regarding our ongoing operating performance that, when considered with net income and EBITDAre, is beneficial to an investor’s understanding of our operating performance.
EBITDAre and Adjusted EBITDAre have limitations as analytical tools, and you should not consider them in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:
| ● | EBITDAre and Adjusted EBITDAre do not reflect our cash expenditures, or future requirements, for capital expenditures or contractual commitments; |
| ● | EBITDAre and Adjusted EBITDAre do not reflect changes in, or cash requirements for, our working capital needs; |
| ● | EBITDAre and Adjusted EBITDAre do not reflect the interest expense, or the cash requirements necessary to service interest or principal payments, on our debt; |
| ● | Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDAre and Adjusted EBITDAre do not reflect any cash requirements for these replacements; and |
| ● | Other companies in our industry may calculate EBITDAre and Adjusted EBITDAre differently than we do, limiting the usefulness as a comparative measure. |
Because of these limitations, EBITDAre and Adjusted EBITDAre should not be considered as a measure of discretionary cash available to us to invest in the growth of our business. We compensate for these limitations by relying primarily on our GAAP results of operations and using EBITDAre and Adjusted EBITDAre only as a supplemental measure of our performance.
The following table sets forth a reconciliation of our net income to our EBITDAre and Adjusted EBITDAre for the periods indicated below (unaudited):
For the three months ended March 31, | ||||||
(in thousands) | | 2026 | | 2025 | ||
Net income | $ | 646 | $ | 2,093 | ||
Interest expense | 2,721 |
| 2,638 | |||
Income tax expense | 7 |
| 17 | |||
Depreciation, depletion and amortization | 910 |
| 1,173 | |||
(Gain) loss on disposition of assets, net | 255 | (763) | ||||
EBITDAre (1) | $ | 4,539 | $ | 5,158 | ||
Stock-based compensation | 468 | 519 | ||||
Real estate related acquisition and due diligence costs | — | 5 | ||||
Adjusted EBITDAre (1) | $ | 5,007 | $ | 5,682 | ||
| (1) | The three months ended March 31, 2025 and 2026 included approximately $1.0 million and $0.5 million, respectively, of income as a result of a solar lease arrangement with a tenant. |
Seasonality
We recognize rental revenue from fixed-rate farmland leases on a pro rata basis over the non-cancellable term of the lease in accordance with GAAP. Notwithstanding GAAP accounting requirements to spread rental revenue over the lease term, a significant portion of fixed rent is received in a lump sum before planting season, in the first quarter, and after harvest, in the fourth quarter. We receive a significant portion of our variable rental payments in the fourth calendar quarter of each year, following harvest, with only a portion of such payments being recognized ratably through the year in accordance with GAAP, in relation to crop insurance contracts entered into by our tenants. The highly seasonal nature of
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the agriculture industry causes seasonality in our business to some extent. Our financial performance should be evaluated on an annual basis, which eliminates impacts of seasonality and other similar factors that may cause our quarterly results to vary during the course of the year.
Item 3.Quantitative and Qualitative Disclosures About Market Risk
Market risk includes risks that arise from changes in interest rates, foreign currency exchange rates, commodity prices, equity prices and other market changes that affect market-sensitive instruments. In pursuing our business strategies, the primary market risk to which we are exposed is interest rate risk. Our primary interest rate exposure will be SOFR. We may use fixed interest rate financing to manage our exposure to fluctuations in interest rates. On a limited basis, we also use derivative financial instruments to manage interest rate risk. We do not use such derivatives for trading or other speculative purposes.
At March 31, 2026, $76.1 million, or 32.7%, of our debt had variable interest rates. The Company had an interest rate swap agreement with Rabobank for $4.9 million. The agreement expired on March 1, 2026 (see “Note 10—Hedge Accounting”).
Item 4.Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
We have established disclosure controls and procedures, as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act, that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives.
We have evaluated, under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, the effectiveness of our disclosure controls and procedures. Based upon their evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosures and procedures were effective at a reasonable level of assurance as of the end of the period covered by this report.
Limitations on the Effectiveness of Controls
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.
Changes in Internal Controls over Financial Reporting
There were no changes in the Company’s internal controls over financial reporting during the three months ended March 31, 2026 that have materially affected, or are reasonably likely to materially affect, the Company’s internal controls over financial reporting.
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PART II. OTHER INFORMATION
Item 1.Legal Proceedings.
For information regarding legal proceedings as of March 31, 2026, see Note 8 to our Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
Item 1A.Risk Factors.
As of March 31, 2026, there were no material changes from the risk factors previously disclosed in response to “Part I – Item 1A. ‘Risk Factors’” in our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on February 19, 2026.
Item 2.Unregistered Sales of Equity Securities and Use of Proceeds.
Unregistered Sales of Equity Securities
None.
Share Repurchase Program
On March 15, 2017, our Board of Directors approved a program to repurchase up to $25.0 million in shares of our common stock. Repurchases under this program may be made from time to time, in amounts and prices as we deem appropriate. Repurchases may be made in open market or privately negotiated transactions in compliance with Rule 10b-18 under the Exchange Act, subject to market conditions, applicable legal requirements, trading restrictions under our insider trading policy and other relevant factors. This share repurchase program does not obligate us to acquire any particular amount of common stock, and it may be modified or suspended at any time at our discretion. We expect to fund repurchases under the program using cash on our balance sheet. On August 1, 2018, our Board of Directors increased the authority under the share repurchase to $38.5 million. On November 7, 2019, our Board of Directors approved an additional $50 million under the share repurchase program. On May 3, 2023, our Board of Directors approved a $75.0 million increase. On November 1, 2023, our Board of Directors approved a $40.0 million increase in the total authorization available under the program, increasing the total availability under the share repurchase program to approximately $85.0 million as of such date. As of March 31, 2026, we had $17.9 million of capacity remaining under the program.
Issuer Purchases of Equity Securities
Our purchases of equity securities during the three months ended March 31, 2026, including repurchases under the share repurchase program, are presented in the following table.
(in thousands except per share amounts) | | Total Number of Common Shares Purchased ⁽¹⁾ | | Average Price Paid per Share | | Total Number of Preferred Shares Purchased | | Average Price Paid per Share | | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | | Approximate Dollar Value of Shares that May Yet be Purchased Under the Share Repurchase Program | |||
January 1, 2026 - January 31, 2026 | 5 | $ | 10.11 | — | $ | — | 5 | $ | 17,929 | ||||||
February 1, 2026 - February 28, 2026 | 17 | 12.17 | — | — | 17 | 17,929 | |||||||||
March 1, 2026 - March 31, 2026 | 12 | 12.91 | — | — | 12 | 17,929 | |||||||||
Total | 34 | $ | 12.12 | — | $ | — | 34 | ||||||||
⁽¹⁾ The total number of shares purchased includes shares of our common stock transferred to us in order to satisfy tax withholding obligations incurred upon the vesting of restricted stock awards held by our employees.
Subsequent to March 31, 2026, the Company has not repurchased any shares of common or preferred stock.
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Item 3.Defaults Upon Senior Securities.
None.
Item 4.Mine Safety Disclosures.
Not applicable.
Item 5.Other Information.
During the three months ended March 31, 2026,
Item 6.Exhibits.
The exhibits on the accompanying Exhibit Index are filed, furnished or incorporated by reference (as stated therein) as part of this Quarterly Report on Form 10-Q.
Exhibit Index
Exhibit | | Description of Exhibit |
31.1* | ||
31.2* | ||
32.1* | ||
101* | The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2026, were formatted in Inline XBRL (Extensible Business Reporting Language): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Comprehensive Income (Loss), (iv) Consolidated Statements of Changes in Equity, (v) Consolidated Statements of Cash Flows, and (vi) Notes to Consolidated Financial Statements. The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |
104* | Cover Page Interactive Data File – the cover page XBRL tags are embedded within the Inline XBRL. |
* Filed herewith
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Farmland Partners Inc. | ||
Date: April 30, 2026 | /s/ Luca Fabbri | |
Luca Fabbri | ||
President and Chief Executive Officer | ||
(Principal Executive Officer) | ||
Date: April 30, 2026 | /s/ Susan M. Landi | |
Susan M. Landi | ||
Chief Financial Officer and Treasurer | ||
(Principal Financial and Accounting Officer) |
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